Touchstar shares rally on trading update

Safiya Bashir
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Touchstar shares rally on trading update

Touchstar shares soared 35% on Wednesday after the group posted a trading update for the year ended 31 December 2020.

Cash generation remained strong and the group ended 2020 with a net cash position of £1.6m with £1.9m of cash in the bank at the year-end. This is up from £850,000 in 2019.

Preliminary results for 2020 will be reported in late April 2021 and Touchstar has said that it expects a profitable outcome on both a pre-tax and after- tax basis.

Chairman, Ian Martin, commented: “I am delighted to confirm that for the year ended 31st December 2020 Touchstar traded profitably, was strongly cash generative, supported customers and most importantly looked after staff in a period of a global pandemic and the largest economic contraction in a generation.

“Enormous credit should go to the management team for having the foresight to realise early on the implications of COVID 19 on society and the economy. It is their timely actions that have enabled us to give a clear and consistent message throughout this crisis to all our employees, customers and shareholders, bringing a degree of calmness to an uncertain time.

“The cautious approach that has served us so well is retained. Our focus remains on supporting customers, cash and the wellbeing of our employees. We continue to not only keep to but exceed the goals in the roadmap we put in place to navigate the business through into 2022,” he added.

Touchstar shares are trading +35% at 67,50 (1438GMT). Shares have surged from lows this year of 19,50.

Global M&A activity soars 88% in H2 2020

Bronte Carvalho
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0
Global M&A activity soars 88% in H2 2020

Global mergers and acquisition (M&A) activity soared by 88% to $2.3 trillion in H2 2020, amounting to the strongest second half in history and overtaking the previous record held by the 46% increase in H2 1997. H2 2020 was also the strongest second half in history in terms of deal value.

According to the research data analysed and published by Sijoiturahastot, the total number of deals worth $10 billion and above was 21% below the 2019 figure, but the number of deals valued between $5 billion and $10 billion increased 38% year-on-year, and their value rose by 36%. The total number of so-called “mega deals” ($5 billion+) across 2020 was 116, up from 97 in 2019.

The strong second half nearly offset the “disaster” that was H1 2020, which saw global M&A deal value in the first six months of the year totalling $1.2 trillion – a 41% decline on 2019. It was also the lowest H1 figure since H1 2013, with the total number of deals closed sinking by 16%.

For two consecutive quarters in H2 2020, the M&A deal value surpassed $1 trillion, with deal value for Q3 and Q4 2020 totalling $2.3 trillion. However, the figures are somewhat misleading, as there was still a 4% decline in the total number of deals in 2020, marking a four-year low.

In the US, the global deal value for the year declined by 21% year-on-year from $2.2 trillion in 2019 to $1.4 trillion in 2020. At the peak of the pandemic, the US also had an 80% decline in M&A activity altogether. Meanwhile in Europe, there was a 34% uptick as the figure rose from $735 billion in 2019 to $988.6 billion last year. Asia Pacific similarly had a 15% increase as its total deal value went from $758 billion in 2019 to $871.5 billion.

Technology was the leading sector in 2020, posting a 49% uptick to reach $679.2 billion and accounting for a considerable 19% of total M&A in the year to date. Financials came in second with a total deal value at $489.6 billion, down 6% year-on-year, while energy & power were third making up 12% of deal activity, despite posting a 13% year-on-year decline.

The industrial sector followed with deals totalling $400.6 billion, a 10% decline on 2019, and accounting for 11% of total M&A. In contrast, the consumer sector was among the most exposed, falling 16% at $156 billion.

According to EY, the stronger than expected H2 rebound in global deal-making is set to continue into 2021, with one of the reasons cited being the “growing popularity” of Special Purpose Acquisition Companies (SPACs). It alleges that these new entities could bring “additional forms of capital to the market”, and adds that “alternative deal models such as joint ventures and alliances” could also fuel deal-making in the coming year.

Why your portfolio needs to improve it’s ESG exposure

UK Investor Magazine
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Why your portfolio needs to improve it’s ESG exposure

ESG has been a growing theme over the past three years and the level of interest from investors was illustrated this week this as data on ESG ETF flows in 2020 found AUM in ESG ETFs grew by 220%.

Alan Green joins the UK Investor Magazine Podcast to discuss the current dynamics and what it could mean for UK Investors. We also explore three UK-listed companies that have strong ESG credentials.

There is consideration paid to oil majors listed in London and what the future holds for them given the launch of the Saudi Arabian NEOM sustainable city project that plans to build a city some 170km in length. NEOM will be careless and run entirely on renewable energy.

Companies discussed on the Podcast include Tesla (NASDAQ:TSLA), NIO (NYSE:NIO), British Honey (LON:BHC), Itaconix (LON:ITX) and Open Orphan (LON:ORPH)

The pandemic success stories ripe for investment

Bronte Carvalho
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0
The pandemic success stories ripe for investment

A new report by UK merchant payment provider Dojo has revealed how industries in the UK and beyond have been impacted by the Covid-19 pandemic.

The report, which used Yahoo Finance and public Purchase Intent data, analysed and ranked which industries benefited most and least from the “unforeseen changes” in their customers’ lifestyles during the pandemic, and highlighted which sectors are most ripe for post-Covid investment.

Despite widespread heartache across a slew of industries – hospitality and retail among others – there have been some lockdown success stories.

Many are fairly expected, with home furnishing and DIY industry growth soaring as isolated households looked to renovate their ‘work from home’ offices and make the most of their new base during lockdown. B&Q owners Kingfisher reported earlier this week that its full-year profits are set for the top end of expectations, after strong online trading boosted sales throughout 2020. The company performed so well that in December it announced its commitment to return £130m in business rates relief, and has seen its shares increase 35.27% over the past 12 months.

Cleaning products enjoyed a boom during the peak of the pandemic, as people increasingly sought to disinfect household surfaces for fear of contracting Covid-19. Unilever – the company behind Domestos and Cif – reported “better than expected” results in H1 2020, and while its Q4 results are yet to be released, the company logged a 4.4% underlying sales growth in the third quarter. Its share price may have been on the erratic side this year – swinging between an annual low of 3,583.50p and a high of 4,943.00p – but has seen overall growth up 0.38% in the past 12 months and, having tipped downwards in the past few weeks, looks ripe for investment before it ticks up again. The brand has been chasing an upward trajectory since 2016, with shares rising 52.82% in the last 5 years, and is likely to continue performing well in the cleaner post-pandemic environment.

Illustration & editing software (+156%) and photography (+138%) both saw huge growth over the course of 2020, as people around the world turned to new hobbies to pass the time locked indoors. Gaming activities – A.K.A. online gaming – also enjoyed a 129% boost in sales, and household favourites such as Electronic Arts – the company behind the Sims – and Take-Two Interactive Software – responsible for the wildly popular Grand Theft Auto and Red Dead Redemption series – have seen their shares gain throughout the year thanks to a surge in gaming during lockdown. Both have performed well in recent months and move into the New Year with plenty of potential as new consoles such as the Sony PlayStation 5 and Xbox Series X continue to drive sales up.

Capitalising on the surge in sports clothing and equipment sales was Nike, which reported a 9% increase in revenue in Q2 2020 and saw its diluted earnings per share up 11% in the same period. The company benefitted from a surge in online sales – with high street stores around the world closed intermittently throughout the year – with digital sales overall up 84%, triple-digit growth in North America and strong double-digit increases in EMEA, Greater China and APLA markets. With sporting events cancelled during the pandemic, Nike was able to cut expenses which would have otherwise been spent on promotions to lower product prices, which proved especially popular during online seasonal sales such as Black Friday. Nike’s shares have continued to rise over the past 12 months, breaching the New Year at more than double what they had been worth in March 2020 when the first lockdown took hold.

The top industries that saw upwards of 100% growth since March

RankIndustryAve. % change from March to Nov
1Home Furnishing458.3%
2Mail Order Catalogues349.2%
3Sports Clothing & Equipment305.8%
4Building & DIY287%
5Silver174%
6Illustration & Editing Software156%
7Car Parts141%
8Electronics141%
9Photography138%
10Fintech135%
11Toy & Crafts130%
12Comms Tech129%
13Gaming Activities129%
14Campervans & RVs126%
15Home Improvement123%
16Telecoms & Mobile Networks118%
17Ecommerce113%
18Copper110%
19Medical Diagnostics109%
20Home & Kitchen Appliances109%
21Cleaning Products107%
22Gold107%
23Resorts & Casinos101%
Data courtesy of Dojo.

Jon Knott, Head of Customer Insights at Dojo, commented on the report’s findings and how the consumer landscape has changed as a result of the pandemic:

“Last year saw changing fortunes in the economy, which have forced retailers to face some of the toughest challenges in generations. Circumstances beyond control have led to rapid consumer shifts, that were previously unheard of. A lot of retailers have pivoted in order to survive, with some understandably being unable to do so. 

“But we’ve also seen other businesses thrive during this time. Our findings confirm that whilst it may have been a tough year for everyone, many industries will come out of the otherside, with some maybe even stronger than ever in 2021”.

TelosNRG launches bespoke ESG package for renewables

Bronte Carvalho
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0
TelosNRG launches bespoke ESG package for renewables

UK-based sustainable energy service provider TelosNRG has announced the launch of a bespoke “ESG package” for the renewables industry, designed to help energy sector companies understand and measure their current ESG performance against key markers of progress.

The service will involve utilising Telos’ expertise in ESG credentials to advise companies on the performance of their own investments. Telos will then “continue to provide support to adapt and implement required processes and measures” as clients proceed to improve the ESG success of their stocks.

Telos founder and managing director, Nicol Shepherd, welcomed the launch and explained the direction of the project: 

“We have used our internal resources to undertake a comprehensive review of our own ESG credentials and feel the expertise we have developed should be shared with others. We consider that the experience gained during this process provides us with a unique advantage providing bespoke ESG offerings.

“As a growing company, we will initially focus our ESG efforts helping SMEs working within the energy sector, globally.”

TelosNRG director responsible for ESG, Angus Miller, added:

“We recognised at an early stage that ESG would become a key factor in how a company is judged, not just by shareholders but by a broader set of stakeholders. Without a decent ESG rating, companies, especially in the energy sector, will be unable to attract finance. 

“As important, companies will find it increasingly difficult to attract staff as people become more aware and invested in the impact their company has on all aspects of modern life”.

Edison Group announces democratising ESG reports for investors

Bronte Carvalho
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1
Edison Group announces democratising ESG reports for investors

Leading investor relations consultancy firm Edison Group has announced the launch of a new series of ESG reports designed to democratise investor access to review companies’ performance and adherence “across the most significant and stringent criteria”.

The reports – collectively called ‘Edison ESG Edge’ – utilise a standardised structure and a “ratified, forward-looking data set of drivers and future performance indicators”, crucial in making companies’ ESG performance easier to discern and to help democratise investors’ access to key markers of success, allowing them to make “more informed investment decisions”.

‘Edison ESG Edge’ will help to solve the challenges investors face in accessing ESG performance data, and will facilitate investor groups obtaining an “all-encompassing report of companies’ financial and ESG drivers”.

In collaboration with data provider Rebalance, ‘Edison ESG Edge’ (fully compliant with the Sustainable Accounting Standards Board (SASB)) begins by analysing data across 10 different “layers” including: strategy, peer benchmarking, ESG SWOT, rebalance scores, environmental performance insight, social responsibility scorecard, socio-political performance, governance scorecard, stakeholder analysis, and ESG Risk and VaR.

The new ESG reporting product then follows up with “in-depth management and employee interviews to test initial hypotheses and mine the narrative behind the data”. The findings are then condensed into a final report with a “strong focus on key ESG drivers, transition opportunities and risks”. Edison’s distribution platform then makes every report available to a global audience of specialist and boutique institutions as well as family offices, wealth managers, retail investors and large institutions.

ESG investing is now a firm feature of mainstream investing, with a recent report by one leading US investment bank finding that flows into ESG funds were up 102% over 2020, and November commitments reaching $47 billion compared with an average of $13 billion in 2019. This upward trend is predicted to continue well into 2021, but access to ESG data is still sparse and at times difficult to assess.

Edison cites investors’ “significant fears over the quality and fragmentation of ESG data” as a driving factor behind the launch of ‘ESG Edge’, and put the ‘greenwashing’ at the very top of their concerns. Assessment of ESG performance has yet to be standardised, and there is a challenge in differentiating true sustainability and what could be merely a green veneer. Many of the data points conceal as much underlying truth as they reveal, Edison warns.

The majority of relevant ESG data is only reaching a “limited proportion of large institutional investors”, which already have the substantial resources and teams of analysts needed to scrutinise such complex data. However, Edison points out that many investor groups – such as family offices and retail investors – are left without the necessary tools to make informed decisions about their investments’ ESG performance.

Neil Shah, Managing Director of Content and Client Strategy at Edison Group, commented on the launch of ‘ESG Edge’:

“While ESG investing is certainly now mainstream most investors do not have access to the level of information they need or the resources to analyse fully ESG data, which is critical for them to make the most informed investment decisions.

“With our Edison ESG Edge reports we address this issue and provide the standardisation of data and the analysis to allow them to accurately assess companies against ESG criteria. Democratising access to ESG data benefits both the companies seeking to prove their ESG credentials as well as the investors looking to commit capital to them, making for more transparent capital markets, which will ensure that, from an ESG perspective, funds flow to the most deserving companies”.

Lidl posts 18% revenue growth & record sales

Safiya Bashir
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0
Lidl posts 18% revenue growth & record sales

Lidl revealed an 18% jump in revenue and record sales for the four weeks to 27 December.

Sales soared over the Christmas period and the average basket size grew by almost 25% year-on-year as the discount supermarket sold 7,000 glasses of mulled wine and almost 17,000 deluxe mince pies every hour.

Christian Härtnagel, Lidl GB CEO, said:

“Despite this Christmas being a difficult time for many across the country, we are pleased to have been able to help our customers enjoy themselves. As we look ahead to this year, we remain committed to our expansion and investment plans.”

Lidl is opening four new stores across the country, which will create 120 jobs. The supermarket is on track to have 1,000 stores by 2023.

Hartnagel said: “I’m proud of our fantastic teams, from our colleagues working on the shop floor to our colleagues in the warehouse and across our offices, who have driven our expansion efforts around the country.

“We’re looking forward to opening our doors to even more communities this year and into this new decade where we see so much potential for further growth.”

The strong sales at Lidl have meant it is the fastest-growing retailer versus the big four supermarkets: Tesco, Sainsbury’s, Asda and Morrisons.

Last month, Lidl said that it would pay back millions in business rates relief. Lidl said the tax relief had been “vital in allowing the discounter to make significant quick unplanned investments”, however, the supermarket was now able to pay back the £100m.

Synairgen shares surge on trial launch

Bronte Carvalho
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0
Synairgen shares surge on trial launch

Shares at British biotechnology firm Synairgen (LON:SNG) have surged more than 7% after the launch of its new large-scale Covid-19 treatment trial.

The Southampton-based company treated its first patient at Hull Royal Infirmary on Tuesday afternoon, using the newly-developed formulation SNG001, which involves the inhalation of a naturally-occurring protein named interferon beta which is believed to jumpstart the body’s antiviral response.

The trial – called SG018 – is being conducted across 20 countries and requires 610 Covid-19 participants who receive supplemental oxygen. Early findings released in June 2020 suggested that SNG001 can cut the risk of a patient becoming severely ill (requiring ventilation or resulting in death) by almost 80% compared to those who received a placebo.

Synairgen is also running an ongoing Phase II trial of SNG001 in non-hospitalised “at risk” COVID-19 patients. A course of treatment costs about £2,000.

“We need treatments as well as vaccines to fight highly pathogenic viruses such as SARS-CoV-2. Development of treatments like ours will remain necessary in cases where vaccines are not effective, for those who do not get vaccinated, and in case the virus mutates to the point where vaccines become less effective,” said Richard Marsden, Chief Executive Officer of Synairgen.

“We believe this trial presents an opportunity for a significant UK scientific breakthrough and, if given the right support, our drug could rapidly assist with the global crisis,” he added.

There is still a bit of a catch though: “To be viable it will have to represent good value for money”.

Synairgen shareholders will be pleased with the stock’s performance on Wednesday morning nonetheless, as shares hiked 7.14% to 165.00p as of 10:15 GMT.

Persimmon posts “robust” 2020 trading

Safiya Bashir
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0
Persimmon posts “robust” 2020 trading

Persimmon has reported “robust” trading during 2020, despite the impact of the pandemic.

In a trading update, the house builder reported a jump in average weekly sales rate per site by 39% over the second half of the year.  Total group revenues were down from £3.65bn to £3.33bn.

Persimmon chief executive Dean Finch said: ““Against the backdrop of the unprecedented challenges of 2020, Persimmon produced a robust performance for the year, as we continued to deliver the new homes the country needs. 

“The group’s strong second half completions were supported by its advanced build coming into the year, an agile and effective response to the Covid-19 pandemic and resilient customer demand.”

“Recent events have served to further demonstrate the continuing near term uncertainties arising from the Covid-19 pandemic. 

“However, we believe that the longer term fundamentals of the UK housing market remain resilient and I am confident Persimmon will continue to deliver superior long term value for all of its stakeholders.”

The number of new home completions fell from 15,885 in 2019 to 13,575 in 2020.

Steve Clayton, Manager of the Hargreaves Lansdown Select UK Income Shares, commented on the Hargreaves Lansdown trading update: “Persimmon enjoyed a strong bounce-back when pandemic-driven restrictions on trading were lifted mid-year. Since then it has bolstered its balance sheet through robust cash generation and a forward sales position of roughly half a year’s expected revenues.

“At this stage, with the end of the stamp duty holiday in sight, taking a cautious view of the immediate outlook is the right approach, but we have seen more bullish outlooks from some of the group’s rivals. Persimmon have also left investors waiting until their full year results in early March for news on the group’s dividend intentions. So perhaps no surprise then to see the shares a little weaker in early trading”.

Persimmon shares are trading -4.56% at 2.658,00 (1015GMT).

Greatland Gold shares rise following receipt of Havieron funding and regulatory approval

UK Investor Magazine
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0
Greatland Gold shares rise following receipt of Havieron funding and regulatory approval

Greatland Gold shares (LON:GGP) rose in early trade on Wednesday morning following the regulatory and funding approval for the initial infrastructure at the Havieron prospect.

Greatland Gold are engaged in a farm-in agreement with Newcrest Mining to develop the Havieron prospect and the funding approval marks a material milestone in the development lifecycle. The prospect is operated by Newcrest who has a 70% interest in the prospect with the option to increase their stake by 5%.

The Greatland Gold share price rose over 4% to 35p in initial trade on Wednesday morning.

The Havieron drill programme has discovered peak mineral grades of 211.3g/t Au, 12.38% Cu and 4,104ppm, making it one of the most significant gold discoveries of recent years.

“We continue our journey towards potentially achieving commercial production from the Havieron Project within three years from the commencement of the box cut and exploration decline. Mineralisation remains open in multiple directions outside of Havieron’s initial Inferred Mineral Resource estimate and, with infrastructure in place at our nearby Telfer mine, we are excited about this growth project. Together with the support of our stakeholders, we hope to deliver significant value from the Havieron Project and our other exploration prospects in the Paterson Province,” said Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas.

Following the receipt of regulatory approval, Newcrest have moved to deploy A$146 million in funding to begin initial works including construction of a box cut, exploration decline and supporting surface infrastructure.

Newcrest are providing Greatland with access to a $50 million loan facility to fund their share of early works.

Greatland Gold share price

Greatland Gold shares have gained a bumper 1,440% in the past 52-week period and the company now has a market cap of £1,343m at a share price of 35p. This make Greatland Gold the 17th largest company listed on London’s AIM market with ASOS being the largest by market cap.

However, despite today’s gains, Greatland Gold shares are still down circa 5% in 2021 YTD after a substantial rally into the close of 2020.

Greatland Gold shares recorded intra-day highs above 38p on the first trading day of 2021, before falling back.

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