Go.Compare owner Future has announced a return to organic revenue growth in Q2 for the six months ended 31st March.

The expected revenue improvement from Q4 2023 has continued, driven by a strong performance from Go.Compare, B2B, and resilience in Magazines.

Future shares were 11% higher at the time of writing.

Future said growth in Go.Compare and B2B has been partially offset by a more challenging performance in affiliate products and digital advertising, where macroeconomic pressures and low visibility continue to impact the wider sector. The key website user numbers metric stabilised in Q2 but remained in a year-over-year decline. This is evident in its peers.

The group owns and operates websites and magazines including The Week, Marie Curie, PC Gamer, Tech Radar and Country Life.

Investors will be encouraged to see progress in the implementation of Future’s Growth Acceleration Strategy (GAS). In February, Future announced a reorganisation to accelerate the Growth Acceleration Strategy, creating three business units – B2C, Go.Compare, and B2B – to enhance the company’s offering to audiences and partners. This reorganisation aims to make the company more agile and less complex, enabling faster execution of the strategy to deliver improved growth.

The company’s “Hero” brands continue to outperform the wider portfolio, showing encouraging progress. Additionally, a stronger performance in US direct advertising, a key strategic initiative, has been driven by the continued focus on premiumisation of advertising inventory.

Future said they remain highly cash-generative, with strong cash conversion in the first half. As a result, Future is on track to deliver on expectations for FY 2024.

Cavendish shares soared on Thursday after the company revealed the synergies of the FinnCap and Cenkos merger in a trading statement highlighting a pick-up in deal activity and cost savings.

The mid-market investment bank’s revenues in H2 are expected to hit approximately £34.5m, a bumper 77% increase compared to the pro forma £19.5m in H1.

Cavendish anticipates statutory revenues of around £47.5m, a 44% increase from the previous year’s £32.9m. On a pro forma basis, full-year revenues are projected to reach approximately £54m, up from £50.5m in FY23.

The newly merged Cavendish team completed multiple deals across all business segments, helping to bolster the company’s balance sheet.

As of 31st March 2024, Cavendish’s cash position stood at approximately £20.8 million, a significant increase from £12.3 million at the half-year mark.

Investors will be delighted Cavendish said it has locked in annualised synergies of £7m from the merger between FinnCap and Cenkos and continues to realise additional cost savings.

Although Cavendish has demonstrated the benefits of the recent merger, the company noted that while the interest rate cycle appears to have peaked, conditions continue to impact demand for UK equities, and challenges remain for the sector.

However, Cavendish said it had buoyant pipelines in both private and public M&A during H2, and its capital markets and M&A pipelines remain strong.

Cavendish shares were 27% higher at the time of writing.

We all know its products!

This food producer’s brands include Ambrosia, Angel Delight, Atora, Batchelors, Be-Ro, Bird’s, Bisto, FUEL10K, Homepride, Loyd Grossman, Marvel, McDougalls, Mr Kipling, OXO, Paxo, Plantastic, Saxa, Sharwoods, Smash, The Spice Tailor, and also a licence with Cadburys for cakes, home baking and ambient dessert products.

The group, which is the UK’s fourth largest such maker, proudly claims that some 90% of all UK households buy one or more of its products each year.

I don’t know about your household, but mine certainly has hundreds of this group’s products on our shelves during any one year.

And with such top name brands I would bet that it is similar in your home too.

In fact, the group’s iconic brands, feature in millions of homes every day. 

A Long Time Building

The creation of Bird’s, the oldest of Premier’s brands can be dated back to 1837.

Similar important timelines can be identified in 1908 with the invention of Bisto gravy, while in that year OXO sponsored the London Olympics.

In 1917 the Ambrosia creamery was set up in Devon, from which it helped to supply dried milk to troops in the First World War.

Other notable dates in the group’s history include: the 1967 creation of the Mr Kipling brand, which has remained the UK’s top cake brand since the late 1970’s; actress Lynda Bellingham first appeared as the OXO mum in 1983, staying for the next 15 years; and the group going public in 2004.

Today over 86% of the group’s total revenues come from its branded products.

Last year the group’s current brand portfolio helped it to generate over £1bn in sales, having grown at an average 5.3% in each of the last three years.

Furthermore, it has a portfolio of category leading brands, with market leadership in five categories: cooking sauces and accompaniments with 15% market share; 44% of flavourings and seasonings; 36% share in quick meals, snacks and soups; ambient cakes 19%; and 39% of the ambient desserts market.

The group today, which has over 4,000 employees, operates from 15 sites in the UK and operates a multi-format, multi-channel approach to serving a broad range of customers, including major UK supermarkets, discounters, e-commerce channels, convenience stores, wholesalers and foodservice operators.

The company claims that it aims ‘to create great tasting products that contribute to healthy and balanced diets, while committing to nurturing our people and our local communities, and going further in the pursuit of a healthier planet, in line with our Purpose of ‘Enriching Life Through Food’.’

Interesting Shareholders

With some 869m shares in issue, the largest holder is Nissin Foods Holdings, the Japanese-based but totally global noodles and snack pot business, with 24.27% of the equity.

Other large holders include Van Lanschot Kempen Investment Management (5.52%), Brandes Investment Partners (4.86%), M&G Investment Management (4.02%), JP Morgan Asset Management (3.64%), Dimensional Fund Advisors (3.63%), Southeastern Asset Management (3.54%), The Vanguard Group (3.04%), Paulson & Co (2.94%) and Fidelity Management & Research (2.40%).

Analyst Views

Taking a consensus average of six analysts that follow the group, they look for 177p for its shares, while 200p is the highest aim.

Taking a positive view of the recent statement that pension deficit contributions will have been suspended from the start of this month, analysts are suggesting that will save the group some £3m a year, thereby boosting its cashflows.

The analysts are now anticipating a ‘re-rating’ for the group’s shares.

Estimates for the year to end March 2024 range around £1,120m revenues (£979m), with adjusted pre-tax profits improving from £137.2m to £152.5m, lifting earnings to 12.9p (12.6p) and boosting the dividend to 1.7p (1.4p) per share.

For the current year estimates are out for £1,170m sales, £160.5m profits, 13.75p earnings and a 2.10p dividend per share.

My View – a FOMO stock?

We will have to wait to see what the last year’s results will actually look like, which should happen in about six weeks’ time (16th May).

However, the recent ‘reprieve’ on the pension deficit payments gives the group quite an important boost.

It also could help to promote the attractions of the group to any potential bidders, including Nissin.

The shares, which are now trading at around the 147p level, help to value the group at a healthy, but attractive £1.29bn.

Could a bid at around the 180p level set the ‘cat amongst the predatorial pigeons’ – who knows, but methinks it is best to be in than miss out.

The FTSE 100 dipped on Wednesday as interest rate tensions sapped enthusiasm for UK stocks as traders awaited important US data due to be released later this week.

Interest rate concerns have taken a back seat lately, with gains in AI-related stocks helping boost global investor sentiment. However, as we entered a new month, the focus has shifted back to central banks and their plans for borrowing costs.

The FTS100 declines were broad yet contained. BT was the biggest faller, shedding 4%, with Prudential and RS Group not far behind. The main factor at play was another soft session in the US spilling over into European stocks.

US equities have experienced a soggy start to April, with profit takers sending many of the ‘Magnificent 7’ tech shares lower and taking the S&P 500 with it.

“After two back-to-back sell-offs on Wall Street, we’ve seen some of the negative sentiment being mirrored this side of the Atlantic, with the FTSE 100 suffering a sharp drop in early trading,” explained Adam Vettese, analyst at investment platform eToro.

“The index had clawed back some of the losses by the afternoon in London, though, with support coming from surprisingly soft eurozone inflation data, solidifying expectations for an ECB rate cut in the summer.”

UK stocks held their own after recent selloffs in the US, but the selling pressure proved too much for the FTSE 100 on Wednesday. The index dropped below 7,900 in early trade before recovering to trade at 7,923 at the time of writing.

“Up until now the market has been remarkably sanguine about expectations on when the first interest rate cut will fall consistently being pushed back. But investors’ patience may finally be running thin,” said AJ Bell investment director Russ Mould.

“Recent releases from the US suggest both that inflation is proving stubborn but also that the economy is proving remarkably resilient. This is creating a situation where central bankers can arguably afford to keep policy tight to ensure they really have slain the inflation dragon.”

Last year, equity traders had their hearts set on rate cuts in March and took the delay to the summer well. However, any suggestions from major central banks, including the Bank of England or the Federal Reserve, that they could prolong the date of their first rate cuts beyond this will be hard for some to take.

Exciting junior gold miner Aton Resources targets near-term production at the under-explored and highly prospective Abu Marawat gold concession in Egypt.

The company is delivering on a ‘3-Part Strategy’ to start production at its 341koz Hamama gold mine, fast-track evaluation of the Semna project, and complete an aggressive exploration campaign across the 255km2 Abu Marawat concession.

Operating in the Egyptian Nubian Shield, TSX-listed Aton Resources is the first international company to be issued an Egyptian mining licence since 2005. 

The only other large-scale modern mine operating gold mine in Egypt is the Sukari mine, owned by London-listed £1.2bn market cap Centamin.

Aton’s 100% owned Abu Marawat concession is located in the Central Eastern Desert of Egypt in the “strategically significant” Arabian Nubian Shield (ANS). ANS is one of the world’s largest Precambrian rock formations and is thought to become a major mining destination due to its rich mineral deposits of gold, cobalt, copper, nickel, and uranium.

Abu Marawat is approximately 200km north of Centamin’s Sukari gold mine, which is forecast to produce 500,000 ounces of gold in 2024.

Aton has encountered gold occurrences throughout the concession area, including the 341,000-ounce gold equivalent Hamama deposit in the west and the Abu Marawat polymetallic deposit in the northeast.

The company plans to progress Hamama to production by 2026 through a starter open pit. The revenues from Hamama will support additional exploration across the concession – an enviable position for an early-stage gold producer.

Securing the gold mining license is an achievement testament to the strength of Aton’s assets and the technical team’s track record of developing world-class resources.

Arabian Nubian Shield 

The Arabian Nubian Shield is a 3 million km2 crustal block of juvenile Neoproterozoic rocks around the Red Sea that covers parts of countries including Israel, Jordan, Egypt, Saudi Arabia, Sudan, Eritrea, Ethiopia, Yemen, and Somalia.

The region is considered one of the most exciting emerging mining destinations due to relatively low levels of exploration to date and a string of recent discoveries.

The Arabian Nubian Shield is home to several Tier 1 gold and copper mines. In Egypt, Centamin operates the 5.8moz gold reserve Sukari mine, while in Saudi Arabia, Barrick produces 32,000 tonnes of copper annually at Jabal Sayid in a joint venture with state-owned Ma’aden.

Because the Egyptian sector of the Arabian Nubian Shield is significantly under-explored, Aton’s Abu Marawat concession is hugely exciting regarding the potential for future gold production.

Abu Marawat and Hamama

Located in the North Western section of the Abu Marawat concession, the Hamama deposit is Aton’s most important target, with plans to begin open-pit mining in 2026.

The Hamama project is characterised by a sequence of overturned Neoproterozoic metavolcanic rocks, predominantly of intermediate composition.

The local geology comprises a footwall sequence of andesitic lavas and tuffs, overlain by tuffaceous volcaniclastic and sedimentary rocks.

Mineralisation

The Hamama West deposit, representing 750 meters of the 3 km mineralised horizon, has an Inferred Mineral Resource of 341,000 ounces of gold equivalent (“AuEq”) and an Indicated Mineral Resource of 137,000 ounces AuEq, as per an NI 43-101 Independent Technical Report.

The Independent Technical Report concluded after a comprehensive campaign of 109 diamond drill holes amounting to 11,827 meters were drilled across the Hamama West deposit.

The mineralisation at Hamama is hosted within a distinctive silica-carbonate horizon. It displays characteristics of a “VMS-epithermal hybrid” deposit type, the shallow marine equivalent of subaerial epithermal systems. This deposit type is similar to other VMS deposits in the Arabian Nubian Shield, such as Bisha and Hassai.

The mineralised horizon at Hamama has a strike length of 3 km and potentially remains open to the east and west. To date, three mineralised zones have been identified: Hamama West, Hamama Central, and Hamama East.

Additionally, high-grade gold-mineralised quartz veins have been discovered at West Garida, 3 km east of Hamama West.

Ancient iron, copper mining, and smelting sites, as well as evidence of Egypt’s ancient gold mining sites and tailings dumps, have been identified in the general Hamama area and the North Garida area, respectively.

Production timeline

To become cashflow positive and support exploration across the entire Abu Marawat concession, Aton plans to develop a starter open pit mining and heap leach processing operation at Hamama West, with the aim of starting production in 2026.

Aton received the license in early 2024 and has set to work achieving this goal.

Tekcapital stock surged after portfolio company MicroSalt’s IPO, and new catalysts are just around the corner.

Tekcapital (LON: TEK) shares soared from just under 7p at the start of 2024 to 17p piece in mid-February, buoyed by the successful IPO launch of promising portfolio company MicroSalt. However, the company’s stock has since fallen to 8.1p, in line with MicroSalt’s market price discovery, today’s Belluscura news, and perhaps also driven by a placing that should see the company financed for some time to come.

For context, MicroSalt ran to as a high as 114p on 16 February having launched at 43p — and the stock is still changing hands at 71.5p after a period of plateau.

It’s probably fair to say that this price action is indicative of two things: a market starved of IPOs, and the difficulty in fairly assessing the value of MicroSalt’s potential given its relatively early stage status, unique product, and top end partners.

The TEK placing

TEK raised £2 million on 29 February at 10p per share — another example of a quality company given the London financial treatment — with £300,000 to be used to complete the build-out and commercial deployment of Guident’s new Remote Monitor and Control Centre, and £500,000 for a new investment into a Generative AI portfolio company opportunity.

The company also repaid a £600,000 (plus interest) loan entered into by subsidiary Tekcapital Europe with portfolio company Innovative Eyewear. The rest of the funds raised, after expenses, are to be used for working capital requirements.

Executive Chairman Dr Clifford Gross notes that the funding will ‘enable us to strengthen our balance sheet, complete the build-out of Guident’s new RMCC to facilitate servicing its growing client base, and form a fifth portfolio company in the Generative AI space.’

There are plenty of factors to unpack here. To start with, MicroSalt should now be self-funding, having raised £3.14 million at the IPO — and TEK continues to hold more than three quarters of its shares.

The placing may have felt a little unfair to long-term holders at the time, but Tekcapital is operating in a difficult market. Taking advantage of the heightened interest around the company to pay off a debt that would have been a long-term anchor, and getting the cash in place to advance its strategy while also getting the money to keep all typical expenses at bay is not a bad compromise.

Tekcapital’s share price is now below that 10p placing price, and in hindsight this leaves TEK better positioned for growth through 2024.

Upcoming catalysts for TEK shares?

While TEK also has interests in Belluscura and Innovative Eyewear — which both hold significant promise over the longer term — there are three potential near-term catalysts for investors to keep an eye on:

• The next MicroSalt contract
• TEK’s AI investment
• Guident’s RMCC update

MicroSalt already boasts contracts with some of the biggest names in the health business, and an update on the success of these current partnerships, or perhaps a new contract with another partner could see a positive corresponding effect on TEK.

The upcoming generative AI investment will also be interesting — presumably this will be a university spin-out as is the corporate model, but having raised at 10p, shareholders will want to see an investment in a company where the juice will be worth the squeeze.

But perhaps the key catalyst to watch is 100% owned Guident, a portfolio company which aims to offer competitive advantages for Autonomous and Electric Vehicles fleet operators via a Remote Monitor and Control Centre (RMCC), utilising artificial intelligence and secure, ultra-low-latency network connectivity.

The RMCC centre, which is being finalised via the £300,000 raised, will monitor autonomous vehicles, and also provide support services such as calling out the emergency services, taking control of the vehicle, moving it out of harm’s way, and even providing real-time comms with passengers.

There are two key economic moats surrounding the portfolio company, which is crucial given the extreme competition in the space.

The first is that it has one of the lowest teleoperation video latencies in the industry, or in other words, video from an AV gets to the RMCC faster than rivals. Guident remains the only teleoperations company with patented systems and methods for remote monitoring and controlling autonomous vehicles, robots, and drones.

The second is its regenerative shock absorber tech — Guident has established a wholly owned subsidiary named Revive Energy Solutions — in response to significant market traction for the tech, including a collaboration with a leading tyre manufacturer and successful proof-of-concept testing results.

The company plans to produce electromagnetic regenerative shock absorbers with advanced energy densities which are capable of capturing and utilising a vehicle’s vertical movements that are part of everyday driving on public roads, and which are currently dissipated as wasted heat energy.

Importantly, Guident has already informed investors that ‘progress is underway with multiple car manufacturers, to assess the manufacturability, cost, and the best approach to rapidly bring the technology to the world market.’

Guident has three key strategic partnerships:

Space Florida and Novelsat — the company was awarded a large grant from Space Florida (independent established by the State of Florida to advance aerospace tech businesses) in 2023. The purpose of the grant was to implement satellite communications as an additional connectivity option for AVs, and the project is now on track to demonstrate teleoperation over satellite communication links in Q2 2024 — or in other words, any time from now to the end of June. This a joint effort with Israel-based Novelsat, a global provider of innovative satellite communication services.

Adastec — Adastec’s flowride.ai system enables SAE Level-4 operation for buses manufactured by Karsan and Vicinity Motor Corp. Guident’s teleoperation solution, integrated with flowride.ai, represents what the two companies see as a ‘breakthrough in autonomous transportation,’ offering full-scope autonomous vehicle monitoring and control coupled with fleet management. Beginning this year, Guident’s RMCC solution will be integrated into Adastec’s automated buses being deployed in the US.

Auve Tech — Guident recently announced a partnership with Estonia-based Auve to integrate its RMCC teleoperation system with Auve’s MiCa autonomous shuttles (already deployed in Europe and Asia), and this partnership has now moved to the implementation phase. This integrated tech will be in place in the first Auve shuttle which has been shipped into the US under Guident’s recently received National Highway Traffic Safety Administration testing approval.

Over the next two years, Guident’s research and development program will develop a roadmap to improve remote control operator effectiveness and implement augmented reality features for enhanced situational awareness and passenger communication. The business also recently adopted a software architecture framework that should help to ensure scalable development, smooth feature releases, customer upgrades, and efficient software license management to support future growth.

The portfolio company is hosting the upcoming National US Autonomous Vehicle Day on 31 May. For perspective — as announced in a recent UKIM interview — Guident is currently organising a US private equity funding round. It’s engaged a US investment bank to facilitate the capital raising which is expected to provide an uplift to Guident’s current valuation.

The round is expected to be completed by the end of Q2 2024, and will have the benefit both of funding Guident but also lifting a financial constraint from Tekcapital’s shoulders.

Tekcapital going forward

Tekcapital is now capitalised, will see strong growth in Guident, and is set to enjoy success with MicroSalt through 2024. Then there’s Belluscura and Innovative Eyewear in the portfolio — and a yet to be named investment into an AI start-up.

In a market where AI dominates the discourse, Guident and this new AI investment could bring TEK back to a premium valuation, and investors know that multiple positive RNSs are going to drop this quarter. 

Of course, the company continues to operate in a difficult market where a combination of the US-based AI bubble and higher interest rates have created record discounts to NAVs. But when rates start falling and the NASDAQ titans fall back to reality, the Tekcapital re-rate could happen fast.

Analysis by broker Hargreaves Lansdown found that those who invest earlier in the tax year produce better returns than those who wait until the end.

“ISA early birds get the returns,” said Sarah Coles, head of personal finance, Hargreaves Lansdown.

With the end of the tax year fast approaching, many will be making preparations to use their ISA allowance before they lose it. However, it is those who choose to invest in the early days of the tax year rather than the last days that earn the best returns, according to Hargreaves Lansdown. 

“The earlier you use your ISA allowance in the tax year, the better, because your investments have longer to grow, and are protected from tax straight away. Over the past ten years, investing on the first day of the tax year could have left you £38,000 better off,” Coles said.

HL’s analysis found that if an investor invested their full ISA allowance in the Legal & General International Index fund on the first day of the tax year every year for the past decade, they would have seen their investments grow to £360,500. This would compare to £322,500 if they had done it on the last day of the tax year.

Sarah Coles explained the benefits of having your money invested from the beginning of the tax year, and also the potential constraints of doing so:

“Early bird ISA investors who have a lump sum to invest at the outset gain up to a whole year of dividends and potential growth in the stock market ahead of those who leave it until the last minute. And because their investments are protected from tax, they don’t risk having to hand over any of these extra gains to the taxman,”

“The early birds aren’t sitting pretty every tax year, and at times of market falls, those who got in towards the end of the tax year will have dodged the drops earlier on. However, the fact the early birds do so much better over time shows how these years are soon forgotten among average stock market performance.”

Tesla shares fell in overnight trade after the electric vehicle manufacturer released disappointing sales figures.

The EV maker’s shares closed down 4.9% at $166 after announcing a 20% drop in sales as the continues to struggle with falling demand for its vehicles.

While a number of factors influence sales at Elon Musk’s Magnificent 7 tech company, investors are appearing to grow tired of faltering sales as the share price continues to decline.

“Ongoing disruption in the Red Sea is just one of the production issues plaguing Tesla, which have contributed to a 20% drop in sales quarter on quarter, with deliveries of just under 387,000 vehicles coming in significantly below market expectations,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“Tesla may have pulled off the tricky manoeuvre of stealing back the crown as the biggest seller of electric vehicles from Chinese rival BYD, but it’s not been enough to arrest a sharp fall in the share price as investors expressed disappointment with the deliveries number.”

Despite earning a place as a ‘Magnificent 7‘ tech stock, Tesla’s stock performance has not lived up to the title.

Tesla shares are down 14% over the past year, by far the worst of the ‘Magnificent 7‘ that includes, Microsoft, Apple, Meta, Alphabet, Nvidia and Amazon. For context, Meta is up 133% over that period.

Tesla’s efforts to push into AI are compounding problems for the car maker, as spending on AI erodes margins already under pressure from falling sales.

“The fabled Magnificent Seven group of tech giants is now splintering off as a playground style popularity contest evolves, based largely on firms’ artificial intelligence credentials,” Streeter explains.

“As the famous five of Nvidia, Meta, Microsoft, Amazon and Alphabet head off on an AI adventure, Tesla and Apple still appear to be searching for the right clues to take advantage of this new world of opportunity.”

Although yesterday’s sales number and Tesla’s general financial performance don’t make for pretty reading, Elon Musk has consistently produced innovations that gain commercial traction. We will learn more about Tesla’s AI endeavours in due course, and loyal long-term investors will hope for another Musk triumph.

Those who liked Tesla at $200 will love it at $166 after yesterday’s drop. 

Scientific instruments manufacturer Renishaw (LON: RSW) was boosted by press speculation that Siemens might bid for the company and the share price rose 100p to £43.50. However, after the market closed Siemens announced that it did not intend to table a bid for Renishaw.

The two founders and main shareholders are both more than 80 years old. Sir David McMurty owns 36.3% and Daniel Deer holds 16.6%.

The two men put their shares up for sale in 2021 and that set off a formal sale process. They were keen that a buyer would not change the way the company is run and the spending on research and development. Siemens was mentioned as a possible buyer that that time.

A suitable buyer was not found, and the two men, who met when they worked at Rolls-Royce, said that they had no intention of selling shares following the ending of the sale process. They did recognise that they would need to think about what to do with their shareholdings over the medium-term.

The share price is around two-thirds of the level it was at the time of the formal sale process. Renishaw is valued at £3.17bn and it is a constituent of the FTSE 250 index. It is forecasts to make a pre-tax profit of £133.2m on revenues of £682m, with an increase in pre-tax profit to £157.7m next year.