Tungsten Corporation shares fall amid “unpredictable market”

Safiya Bashir
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Tungsten Corporation shares fall amid “unpredictable market”

Tungsten Corporation shares (LON: TUNG) plummeted 20% on Friday’s opening after the group posted a trading update amid “challenging market conditions”.

The group posted a decline in transaction volume by 8% and revenues and adjusted EBITDA would be impacted for the remainder of the financial year.

Andrew Lemonofides, Tungsten’s Chief Executive, commented:

“Tungsten has faced a difficult and unpredictable market in 2020. In spite of these challenges and the decline in transaction volumes, we have won new customer relationships and we expect to deliver broadly similar revenues to FY20. This performance is underpinned by the investments that we have continued to make in our sales and product capabilities, coupled with our operational gearing following our cost base reductions in H1.

“It is disappointing that our profitability is going to be materially lower that we expected this year, however, the Company remains focused on improving efficiency and converting its pipeline of opportunities to drive growth in sales.”

Looking forward, the company said in the update that it expects the macro economic environment to remain challenging over the coming months but anticipates that the gradual easing of restrictions, transaction volumes will begin to return to pre-pandemic levels during FY22.

Tungsten Corporation shares (LON: TUNG) are trading -15.39% at 26,48 (1034GMT).

Wetherspoon shares sink as more than four in ten of its pubs will remain closed

Jamie Gordon
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Wetherspoon shares sink as more than four in ten of its pubs will remain closed

Cut-price pub chain, JD Wetherspoon (LON:JDW), saw its shares slide on Friday, as It announced 42% of its entire UK estate would remain closed, subject to new tier restrictions beginning next week.

The company said that of its outlets, 13 pubs in England and 51 in Wales would be classified as being in tier one or a tier one equivalent. Meanwhile, 435 of its branches – including 17 in Scotland – will be in tier two, meaning customers will have to take advantage of a meal deal in order to get their hands on a hard-earned pint.

Finally, Some 366 pubs will remain closed, with 315 in England, and 51 in Scotland and Northern Ireland, falling within the tier three strata. Wetherspoons said that the decision to keep the doors shut on these branches was taken as takeaways are “unlikely to be a realistic option”.

The bombastic Wetherspoons Founder and Chair, Tim Martin, responded to the pub closures and implementation of an updated tier system:

“The company has campaigned for pubs to revert to the rules agreed between the pub industry, civil servants, local authorities and health officials, which were introduced when pubs reopened in July.”

“These rules greatly reduced pub capacity and provided strict social distancing and hygiene standards but, with difficultly, allowed pubs to trade viably. It is very disappointing that yet another raft of regulations has been introduced, which has effectively closed half our pubs. In reality, the government has extended a form of lockdown, by stealth, in large swathes of the country.”

“There has been no evidence of widespread transmission of the coronavirus in pubs, as the Test and Trace system has evidenced. As councillor Ian Ward, leader of Birmingham City Council, recently said:”

“The data we have shows that the infection rate has risen, mainly due to social interactions, particularly private household gatherings. In shops and hospitality venues there are strict measures in place to ensure they are COVID-safe, whereas it is much easier to inadvertently pass on the virus in someone’s house, where people are more relaxed and less vigilant”.

Following the update, Wetherspoons shares sunk 2.11%, down to 1,111.00p apiece 27/11/20. This price is below its post-lockdown high of 1,201p, but around 3% ahead of analysts’ target price of 1,080p per share.

The company currently has a p/e ratio of -12.41, while analysts have a consensus ‘Hold’ stance on the stock, and the Marketbeat community give it a 72.51% “underperform” rating.

Spotify sacrifices short-term profits to grow subscriber base by 27%

Jamie Gordon
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0
Spotify sacrifices short-term profits to grow subscriber base by 27%

Music streaming giant, Spotify (NYSE:SPOT), announced that its subscriber base soared by 27% in the third quarter, up to a total of 144 million. Similarly, the company stated that its monthly active users bounced 29% year-on-year, up to 320 million.

According to research published by Comprar Acciones, Spotify had just (I know, just) 18 million subscribers in the first quarter of 2015. This doubled by Q2 2016, and then again by Q4 2017, and now doubling again, to the figure recorded in the quarter just gone by.

Spotify subscribers, Spotify data, Comprar Acciones graphic

Following the increase in the number of subscribers, the company’s subscription revenue hiked 15% year-on-year during Q3, up to €1.79 billion. Overall revenue rose by 14% in the same comparison, up to €1.98 billion, while ad revenue increased by 9%, year-on-year and 41% in a quarter-on-quarter basis, up to €185 million.

Despite the company’s seemingly impressive growth, tough, Spotify booked a €101 million loss during the period, swinging from a €241 million profit during Q3 2019. This downturn, the company said, was the result of discount plans being offered to increase its userbase – which saw revenue per user fall by 10%, down to €4.19.

As stated by the Billboard report, music streaming sales accounted for 56% of all global music sales in 2019, with streaming revenue soaring 23%, while subscription revenue shot up by 24% and accounted for 40% of total label income.

At the topic of the music streaming tree, Spotify claims 35% of total music streaming market share, and along with Apple Music (19%) and Amazon Music (15%), the top three claim 67% of the market.

These trends are only expected to become further entrenched going forwards. While taking a hit to short-term profits, Spotify has positioned itself well for 2021 by bringing record numbers of users into its platform – many of whom for the first time. Speaking on the music streaming market as a whole, Comprar Acciones financial expert, Nica San Juan said:

“By the end of 2020, revenue in music streaming is expected to reach $16.4 billion according to Statista. That would mark a 15.0% increase YoY. The segment’s user base is expected to reach 595.8 million by the end of the year, marking a 15.1% YoY increase.”

“Revenue from music streaming is expected to grow at a 5.4% compound annual growth rate (CAGR) between 2020 and 2025, to reach $21.3 billion, and a total of 933.2 million users.”

Global equities look half-baked on Thanksgiving

Jamie Gordon
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Global equities look half-baked on Thanksgiving

Still mulling over Monday’s gains, global equities had to settle for an uneventful Thanksgiving Thursday, as US traders busied themselves with carving turkey.

In a directionless session, lacking much in the way of either volume or movement, non-US stocks didn’t post any performances worth noting, with any developments likely to be reversed once the Dow gets into full swing from next Monday. Commenting on the quiet day, IG Chief Market Analyst, Chris Beauchamp, said:

“Perhaps this year they will be thankful for the rest after the craziness of 2020 and all the volatility that has come with it. November has not been exactly quiet either, with stock markets finding their springboard to a fresh rally thanks to the election and vaccine news.”

“That rally has cooled this week, leaving indices to drift back from their recent highs but without any real conviction.”

“Without the US today and (mostly) tomorrow we can look forward to more drift, especially since investors are expecting more gains in December.”

As the final bell rang, Eurozone indexes were broadly flat, with the CAC and DAX down by 0.081% and 0.024% apiece. Likewise, the FTSE had a fairly uneventful day, though the 1% drop in Brent Crude weighed on oil stocks, and saw the UK index shed 0.44%. Now at 6,362 points, it the top British equities now sit around 10 points ahead of where they began the week.

Friday will likely be much of the same for global equities, though the effects of the UK’s loosening lockdown restrictions may provide some optimism for hospitality and travel stocks – provided case numbers don’t rise fast enough to inspire another full-scale lockdown in the new year.

Low Carbon Innovation Fund backs efficient LED lighting as part of £760k funding round

Jamie Gordon
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Low Carbon Innovation Fund backs efficient LED lighting as part of £760k funding round

Environment and energy efficiency specialised merchant bank, Turquoise, announced on Thursday that it had completed its fifth deal on behalf of the Low Carbon Innovation Fund 2. This latest deal was part of a £760,000 funding round, and saw the European Regional Development Fund-backed organisation invest in LED light specialists, Kubos Semiconductors.

Using technology derived from the University of Cambridge, Kubos develops LEDS in cubic Gallium Nitride, in order to deliver efficient green and amber devices. The company’s technology enables the production of ‘high-end, low-cost, highly-efficient LEDs’ by solving the green gap problem (efficiency is often lower in green and amber devices versus their blue and red counterparts).

The company said that the main applications of its technology are in general lighting, micro-LED displays, automotive, street lighting and digital signage settings.

Speaking on the announcement of new Low Carbon Innovation Fund 2’s investment, Turquoise Directors, Axel de Mégille, commented: “Kubos LED technology will represent a massive improvement in lighting and displays efficiency, significantly reducing energy consumption and accounting for less CO2 emissions. This investment fits very well in the investment strategy of LCIF2 into technologies helping to reduce greenhouse gases (GHGs).”

Kubos chief executive Caroline O’Brien added: “We are delighted to welcome LCIF2 as an investor in Kubos. This investment will enable us to further our development program to deliver a commercial proof of concept and start engaging with potential customers. LCIF2 will also enable us to strengthen our links with local and national government.”

Funded by the European Regional Development Fund, the Low Carbon Innovation Fund 2 is managed by the UK Ministry of Housing, Communities and Local Government. This latest round of investment follows previous contributions to agritech startup, KisanHub, and £350k in funding towards EV battery recycling specialists, Connected Energy.

First Property posts 30% profit plunge

Safiya Bashir
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0
First Property posts 30% profit plunge

First Property shares (LON: FPO) were down over 5% on Thursday as the group reported a 30.2% drop in pre-tax profits.

For the six months to 30 September 2020, the group reported a fall in profits from £3.0m to £2.1m.

The group reduced net debt from £57.19m in March to £19.83 and also increased net cash reserves to £21.21m.

Commenting on the results, Ben Habib, Chief Executive of First Property Group, said: “The sale of Cha ubińskiego 8 (CH8) in April released some GBP17 million in cash and put the Group in a strong position from which to navigate the economic fallout of the COVID pandemic.

“As a consequence of the sale there has been a reduction in rental income, which is the primary reason for the reduction in earnings reported today.

“This reduction should be temporary and last only until we reinvest the cash. We expect to do so in association with clients of the Group. Our aim is to invest some 10-20% of the equity required in any acquisition which, when coupled with bank debt, should enable us to acquire up to some GBP300 million in property.

“There is a great deal of flux in the market at the moment and we expect interesting opportunities to emerge next year,” he added.

First Property shares (LON: FPO) are trading 5.97% down to 36,20 (1611GMT). In the year-to-date, shares have fallen from highs of 49,00.

Hedge fund managers are divided over an airline recovery in 2021

Jamie Gordon
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0
Hedge fund managers are divided over an airline recovery in 2021

Trading platform, IG Prime, published a white paper laying out the views of 253 hedge fund managers, on which sectors are most likely to grow over the next twelve months.

Within the 41-page document, titled ‘Hedge fund trends: Covid-19 vs the global financial crisis’, 73% of those surveyed said that health and pharma will increase in value – making it hedge fund managers’ top ranked sector for growth over the next year. This, the report states, should come as little surprise given the attention and resources thrown behind COVID vaccine candidates, as well as treatments and PPE.

Similarly – and perhaps surprising to some – the airline and travel sectors ranked as the third most likely sector to grow during 2021, within 50% of hedge fund managers and 82% of UK investors backing a resurgence in the pandemic-suffering sector.

With EasyJet recording a 200% increase in flight and holiday package searches over the Christmas period, the easing of travel restrictions should provide a boost over the year-to-year transition period – though the longevity of these relaxed measures remains to be seen.

IG said that financiers’ outlooks were largely positive, with 52% of hedge fund managers and 94% of UK investors surveyed saying that it was ‘very unlikely’ that COVID will affect their funds’ performances over the next ten years.  

Other noteworthy stances include a 66% positive outlook for digital tech – with many questioning the sustainability of this year’s surge in tech growth equities – and a 15% positive prediction for oil – as OPEC said manufacturing demand for oil would not recover until at least mid-2021.

Here is the full list of hedge fund managers views on the likelihood of an increase in value over the next 12 months will be for the following sectors:

Health and Pharma – 73%

Digital Technology – 66%

Airline/Travel – 50%

Financial Services – 46%

Retail – 40%

Real Estate – 38%

Automotive – 36%

Cryptocurrencies – 23%

Precious Metals – 18%

Indices – 17%

Oil – 15%

Forex – 13%  

Pebble Group shares soar on resilient pandemic trading

Jamie Gordon
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0
Pebble Group shares soar on resilient pandemic trading

Tech service provider to the promotional products industry, The Pebble Group (AIM:PEBB), watched its shares soar on Thursday as it published a performance update illustrating determined performance during the pandemic, and revealing that full-year results were on track to meet market expectations.

Its Facilisgroup segment – an ecommerce platform for promo products businesses in North America – performed ‘robustly’ through the COVID crisis. Its number pf participating partners rose from 149 to 169 during the year-to-date, with an additional 6 contracted and awaiting implementation.  

Gross Merchandise Value processes by it partners are now expected to hit $1 billion by the end of 2020, which would make Facilisgroup a ‘major consolidator’ in the promo [products industry. Similarly, partners’ sales are returning to pre-pandemic levels, with this indicating a positive outlook for the promo products industry in 2021.

 The company’s statement added: “We continue to invest in Facilisgroup to further improve its valued services to Partners and Preferred Suppliers and are increasingly positive about the business’ prospects.”

Its Brand Addition segment – which provides promo products and related services to large brands – have ‘continued to improve’ since the update delivered in September, with the two major clients secured in Q1 now successfully launched and contributing to FY20 revenue.

So far during the second half of 2020, sales orders have averaged 70% of the previous year, though the company noted that there was positive momentum going into 2021.

Pebble Group stated: “We believe this demonstrates the inherent strength of our clients’ businesses and their appetite for our products and services. Client retention has remained strong with all major clients that entered the COVID-19 affected period in March 2020 continuing to be clients today.”

 In total, the company said its balance sheet remains strong. Having paid off £6.5 million of its £10 million credit facility since its last update, the group said it expects to have repaid all of the outstanding sum by the end of the year. It added that it expects its cash balance to be similar to the prior year position of £8.9 million, after a settlement of £2.4 million of IPO costs included in the previous year’s balance.

Looking ahead, the Pebble Group outlook read: “Facilisgroup continues to deliver in line with expectations and we are actively seeking opportunities to build on this success by strengthening its services organically and through acquisition.”

“The current trend in order patterns of Brand Addition’s blue-chip client base gives us real confidence as we approach 2021.”

“Coupled with a strong balance sheet and the long-term nature of our Partner and client relationships, we are confident in managing the Group responsibly through the current volatility, meeting market expectations for FY 20 and continuing to deliver on the Group’s strategy in FY 21 and beyond.”

Following the update, the company’s shares rallied by 20.66%, to 104.38p apiece 26/11/20. This is below its post-lockdown high of 115.00p, but ahead of its recent nadir of 71.00p a share.

TClarke PLC shares surge as orders grow

Safiya Bashir
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0
TClarke PLC shares surge as orders grow

TClarke PLC shares (LON: CTO) surged almost 13% on Thursday as the group released its latest trading statement.

The group said in a statement that trading has been resilient and that trading continues in line with expectations for the full year ending 31 December 2020.

TClarke PLC anticipates turnover for 2020 to be circa £240m. Over the second half of the year, the group has won new projects from clients and the forward order book has increased by 17% to £422m.

Mark Lawrence, the group’s chief executive said: “TClarke has once again demonstrated the direct benefits of our excellent reputation within our industry that has helped drive our clients’ continued confidence to work with us and award the Group significant new projects.

“Looking to the future, we have a well-balanced approach to winning work with projects from a range of sectors and I am delighted that we have been so successful in the Healthcare and Technology sectors in particular.

“The UK Government recently announced a long-term commitment to developing further green initiatives covering clean energy, transport, nature and innovative technologies, that will help the UK to forge ahead with eradicating its contribution to climate change by 2050. TClarke is well positioned to benefit from these initiatives and is already working on a wide range of exciting projects that support these moves.”

TClarke PLC shares (LON: CTO) are trading +12.88% at 99,00 (1310GMT).

FTSE 100: The influences of vaccines and Brexit on London’s leading index

UK Investor Magazine
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FTSE 100: The influences of vaccines and Brexit on London’s leading index

Alan Green joins the UK Investor Magazine Podcast as we explore the key influences on the FTSE 100 including vaccines, Brexit, Sterling and Rishi Sunak’s latest spending plans.

We also discuss in detail Power Metal Resources (POW), Venture Life Group (VLG) and Itaconix (ITX).

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