Rockrose continue strong start to 2020 with Cotton gas field acquisition
Rockrose Energy (LON:RRE) have said that they will complete a 100% acquisition of the Cotton gas field in the UK.
The Cotton Gas field forms part of the UK sector of the Southern North Sea, and the deal terms are yet be disclosed.
Rockrose have signed a sale and purchase agreement to acquire Speedwell Energy Ltd, which owns all of the Cotton gas field.
The purchase comes at an impressive time for the firm, who have pledged to grow across 2020 and increase volumes of operations.
The Cotton gas field lies 100 kilometers east of Scarborough between the Kilmar and Garrow Fields, where Rockrose hold a 15% interest in both sites.
The field was initially discovered in 2009 by well 43/21b-5Z, which encountered a gas column of up to 1,260 feet over six gas bearing sandstone units.
Rockrose have told the market and shareholders that a draft development plan has been prepared by Speedwell for submission to the UK Oil and Gas Authority.
Once regulators have given the green light of approval, then Rockrose have the all clear to ensure that production and development can commence.
Rockrose intend to commence further studies and observations on the field before taking a final investment decision, which has been affected by both volatile oil and gas prices tied in with an uncertain macroeconomic environment.
Andrew Austin, Executive Chairman of RockRose, said:
“This acquisition gives RockRose the option of a significant amount of production and reserves in an area of the Southern North Sea Gas Basin in which we already have other producing assets. We look forward to carrying out further evaluation of the discovery prior to committing to FID.”
Richard T Strachan CEO of Speedwell Energy Limited added:
“Having identified the potential in Cotton some three years ago, which was a relinquished asset going nowhere, to one now where we have a draft Field Development Plan and a delivery team in place capable of bringing Cotton through to First Gas, we are delighted that RockRose will now take over Cotton and are looking at how to potentially take it forward and we wish them all the best as they do so.”
Genedrive shares dive 64% as losses double
Genetic test developer Genedrive (LON:GDR) saw its shares go into free fall as its losses widen year-on-year.
During the six months ended December 31 2019, the company’s losses stood at £2.57 million, widening from £1.38 million for the same period a year earlier. Further, its loss per share grew from 7.0p to 8.9p
The company reported revenues and other income had narrowed from £.15 million to £0.6 million on-year, due to slow commercialisation of its HCV ID kit.
It also stated that its focused R&D spend decreased from £2.5 million to £2.3 million, while its finance costs widened £0.4 million to £0.8 million.
It added that its cash position dropped during the half year, from £5.2 million to £3.5 million.
Genedrive comments
CEO of the company, David Budd, commented: “The Genedrive® instrument has been proven to perform exceptionally well in the field as demonstrated in HCV study data and AIHL CE marking studies. The challenge for us remains exploiting its performance and driving revenues as we progress to our strategic goal of material revenues from our assays. We are very excited in the potential of AIHL, which has obtained CE marking in the period, and whilst we are cautious on meeting our short-term revenue expectations, we also remain confident in the long-term potential of the DoD and the HCV markets and are keenly focused on this important next stage of the Company’s evolution.”Investor notes
Following the update, Genedrive shares have dropped 64.29% or 13.50p, to 7.50p per share 04/02/20 14:37 GMT. Analysts from Peel Hunt reiterated their ‘Buy’ stance on the company’s stock on Tuesday. The group’s market cap is £2.79 million, their dividend yield is unavailable.Power Metal Resources find ‘gold nuggets’ at Alamo
Power Metal Resources PLC (LON:POW) have said on Tuesday afternoon that they have seen gold at their Alamo project located in Arizona.
The firm particularly highlighted the presence of gold nuggets within the project area, however shareholders have not been so confident in the update.
Shares in Power Metal have dived 10.69% to 0.31p across Tuesday trading. 4/2/20 14:24BST.
Power Metal said: “This sampling demonstrated the presence of coarse, near-surface gold while the topographical surface morphology supports a likely proximal hard-rock source for the gold. The findings also provide some support to reports that some 60 ounces of gold nuggets have been recovered within the project area (the largest nugget reportedly weighing approximately 5 ounces).”
Yesterday the firm said that one of its investee companies, in Katoro Gold PLC (LON:KAT) had transferred ZAR5 million to Blyvoor Gold Operations to commence a joint venture project.
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented:
“We are pleased with the progress made regarding our assessment of the Alamo Project. The identification of a potential porphyry engine for the phenomena seen at surface is of particular interest.
In addition, we are encouraged by the confirmation of near-surface gold nuggets, through a very limited metal detecting exercise and the potential for a proximal bedrock gold source within the Project area.
We now need to ensure that the claims package is complete and covers the prospective ground with a sufficient buffer and will undertake some additional work to ratify our assumptions to date.
We will discuss in greater detail the terms of a potential transaction upon conclusion of our due diligence.
I look forward to providing our shareholders with further updates in due course.”
Power Metal December update
Power Metal Resources saw their shares spike in December, following an announcement which showed progress on their Alamo project. The Alamo project is a package of mining claims covering an area of approximately 340 acres and is situated in west-central Arizona, the company said. Power Metal will take over subject to due diligence, this includes nugget verification and geochemical sampling. The firm will pay Carrabba and Nye $25,000 – through the issue of 4.9 million shares – during the due diligence period, which may test shareholder patience. The period can be extended, which Power Metal will then be forced to issue a further 2.9 million shares, at the same price. The shares have been priced at 0.4p, which reflects a slight undervalue to the current trading price. It seems that Power Metals have agreed a deal which encourages the investment into the firm, and also raise funds to expand further operations. Power Metal can then earn the 60% stake in the project by spending $1.1 million on property payments and exploration costs. The company said it would expect to pay a “modest” $150,000 in the first year. Despite progress at the Alamo project, it seems that shareholders have not held much faith in the company as reflected in today’s stock price movement.Mattioli Woods report strong half year as revenue rises 3.8%
Mattioli Woods (LON:MTW) have told shareholders on Tuesday that they have seen their interim earnings rise in the first half of its current financial year.
The firm added that it is well positioned to carry on its growth strategy and make progress across the remainder of its financial year.
Commenting on the results, Ian Mattioli MBE, Chief Executive Officer, said:
“I am pleased to report revenue increased by 3.8% to £30.3m (1H19: £29.2m) for the six months ended 30 November 2019, with improved organic growth of 1.8% (1H19: 1.3%) primarily driven by increases in discretionary portfolio management, direct SSAS and SIPP and property management fees. This organic growth was supplemented by a full six-month contribution from the Broughtons and SSAS Solutions businesses acquired in the prior financial year, which are performing and integrating well.
The wealth manger told the market that pretax profit had risen 7.1% in the half year period ending in November 2019, giving a total of £6 million from £5.6 million one year ago.
Additionally, shareholders would have been further pleased as Mattioli Woods saw revenue growth of 3.8% from £29.2 million to £30.3 million across the six month period.
Mattioli Woods said that the main source of its revenue was primarily fee based, however on an organic basis the firm noted that revenue did rise steadily by 1.8%. This was driven by increases in discretionary portfolio management, direct small self-administered schemes and self-invested personal pension and property management fees.
“Adjusted EBITDA margin increased to 28.4% (1H19: 26.4%), with additional efficiencies and cost savings realised following the planned restructuring of our client facing operations and the migration of acquired pension portfolios onto our proprietary MWeb administration platform. In addition, the adoption of IFRS 16 decreased other administrative expenses by £0.4m, representing £0.4m of the increase in adjusted EBITDA and 1.3% of the increase in adjusted EBITDA margin.” added the CEO.
Mattioli remain confident
The firm has delivered some impressive results over the last few months, and the sentiment was made aware in the comments from the CEO as he continued: “We believe the benefits of operating a responsibly integrated business allows us to secure great client outcomes including controlling clients’ costs whilst delivering strong, sustainable shareholder returns over the long term. The Board remains committed to growing the dividend, while maintaining an appropriate level of dividend cover. Accordingly, the Board is pleased to recommend the payment of an increased interim dividend, up 15.3% to 7.3p per share (1H19: 6.33p). “In addition to the positive contribution from recent acquisitions, the Group generated an increased share of profit from Amati of £0.3m (1H19: £0.2m), whose total funds under management had increased to £510.2m (31 May 2019: £452.8m) at the period end. “In December 2019, we were pleased to follow the Broughtons and SSAS Solutions transactions with the acquisition of The Turris Partnership Limited, which provides chartered financial planning and wealth management advice and has over £65m of client assets under advice. “Clients need long-term advice and strategies more than ever before. More than a decade of low interest rates and evolving client preferences, including environmental, social and governance considerations, have created challenges for people seeking to generate income, while preserving and growing their capital. While we anticipate greater client activity and increasing inflows into our bespoke investment services following the UK General Election result in December 2019, there remains some uncertainty around the exact shape of Brexit. “We will continue to provide quality solutions, maintaining our focus on client service and continuing to adapt our business model to the changing market, integrating asset management and financial planning to build upon our established reputation for delivering sound advice and consistent investment performance, while looking to reduce clients’ costs. “We plan to build on the progress achieved in the first half of this financial year, advancing our strategic initiatives, such as the development of new products and services and our own IT solutions where possible. Our profit outlook for the year remains in line with management’s expectations and we believe the Group is well-positioned to grow, both organically and by acquisition, to continue delivering sustainable shareholder returns.” Shares in Mattioli Woods trade at 860p (+2.38%). 4/2/20 13:16BST.DWF says PMI rebound not enough to rebuild deflated construction sector
Kate Kirby, Construction & Infrastructure Partner at global legal business, DWF (LON:DWF), offered a pessimistic outlook on the construction sector.
With global equities looking back fondly at 2017 and 2018, 2019 and the start of 2020 have offered little in the way of certainty or reasons to celebrate.
Markets have been weighed down by prevailing political uncertainties. These being brought about by the rise of populist movements across the ‘West’, and the challenges being posed by the US and China wrestling for global hegemony.
Today’s construction PMI figures offered some cause for celebration, however this optimism largely goes against the grain. Property, manufacturing and construction will all have to contend with the practicalities of Brexit, a Sino-US trade deal second phase and even Coronavirus. Today’s lift is perhaps light relief against what appears to remain a backdrop of uncertainty.
Speaking on the results, Kate Kirby of DWF stated:
“Like the manufacturing sector, construction is highly reliant on economic certainty and, as we all know, that was been in short supply throughout 2019. However, the start to 2020 looks a little better. There was some sign of improvement, in that the slowdown in the construction sector eased to its slowest pace in eight months in January but the fact that the two largest contributions to the fall in output came from civil engineering and commercial construction is troubling.”
“The latest construction PMI data is unlikely to provide any real comfort. Though this rebound is a welcome sign, the danger remains the sector could shrink again. The political situation in the UK and its attempt to navigate through trade deals this year could see construction businesses experiencing a see-saw of good and bad news in the coming months.”
Coronavirus will be around for “months” warns UK Health Secretary
Hong Kong have reported their first coronavirus death on Tuesday, as the country has been hit with a global health worry about the potency of the lethal disease.
Hong Kong became the second mainland that has reported a death, which has killed 427 people as the numbers rise vastly.
Only a few days back, I was sitting in this same spot writing about the coronavirus death toll reaching 81 but looking now at the 427 figure, this has not just become a case of a global health disaster but also a global economic disaster.
Chinese markets have leveled toady after it was reported yesterday that almost $400 billion was wiped off stock and business values yesterday, but the bad new has far from stopped.
It was interesting to see that Hyundai Motor (KRX:005380) said today that they were planning to suspend operations in South Korea due to the risk of the coronavirus disrupting supply chains.
Hyundai became the first automobile manufacturer to stop production outside of China, and the economic impact of the virus continues to weigh down on the global economy.
“Hyundai and Kia may be more affected as they tend to import more parts from China than other global automakers,” said Lee Hang-koo, senior researcher at the Korea Institute for Industrial Economics & Trade.
“South Korean parts makers followed and built their own facilities along with Hyundai,” Lee said.
The health secretary Matt Hancock has warned the British public that the coronavirus “will be with us for at least some months to come”, as growing concerns of British people rise over potential cases of the lethal disease spreading to the UK.
He told the House of Commons that the number of new cases worldwide was “doubling every five days” and dealing with it was “a marathon, not a sprint”.
These are testing times for global governments, however as Hancock said this could be something which is dealt with over a period of months, and an instant resolution may not be available.
Uniphar remain confident to deliver growth across 2020
Uniphar PLC (LON:UPR) have said on Tuesday that they are confident to deliver growth in 2020, following a strong performance in the recent year of trading.
The firm, who works in providing healthcare services said that it has performed well in 2019, following organic gross profit growth of 7% as earnings before interest, tax, depreciation and amortisation remained in line with forecasts.
The firm said that it is continuing to build on its growth strategy to meet the needs of speciality manufacturers through the provision of higher value services.
For 2020, the firm said “Looking forward into 2020, Uniphar is well positioned to deliver continued organic growth across all divisions, in line with its medium-term outlook, with the additional benefit of the full year impact of recent bolt-on acquisitions.”
Ger Rabbette, Group Chief Executive commented:
“Our trading update reflects a strong performance for 2019 in line with Group expectations and positions us to deliver our plan for 2020 consistent with our medium term outlook. We are delivering on our committed strategy in our growth divisions being:
1. Growing a pan European platform in Commercial & Clinical where we are now present in the Nordics as well as Ireland, UK and the Benelux; and
2. Developing a global platform in our Product Access division which is now in place following the acquisition of Durbin
Our Product Access and Commercial & Clinical divisions continue to be the key growth engines for the Group particularly in the UK, Benelux and Nordics markets while Supply Chain & Retail saw strong volume and gross profit growth in Ireland.
We are well positioned going into 2020 for the next stage of our planned development in delivering our five-year strategy of doubling EBITDA. Additionally, we look forward to declaring a dividend for our shareholders.”
Uniphar’s two new acquisitions
In November, Uniphar said that they had acquired two new firms as part of their growth and development strategy.
The two names acquired were Nordic based EPS Group and Irish firm M3 Medical.
The total potential cost for EPS Group and M3 medical will be approximately €40 million, and they payment will be spread over four years.
The deal will be financed from the funds raised from the initial public offering in July, and coupled with a combined placing shortly after was valued at €139 million.
On a pro-forma basis, for 2019, these acquisitions in aggregate are expected to deliver revenue of about €22 million.
Both the EPS Group and M3 Medical will be integrated into the Commercial & Clinical Medtech division of Uniphar.
Shares in Uniphar trade at €1 (-1.17%). 4/2/20 12:36BST.
Petards Group shares sink over 20% as annual loss expectations worry shareholders
Shares of Petards Group PLC (LON:PEG) have crashed over 20% on Tuesday as the firm told the market it expects to report an annual loss.
The firm said that project delays had contributed to the 2019, as the firm saw their shares in red.
Shares in Petards Group trade at 9p (-20.08%). 4/2/20 12:10BST.
The security and surveillance technology company said that it is expecting a pretax loss for 2019 – following a change to a big customer order. Petards said that a customer re-scheduled eyeTrain system deliveries into 2020, which hindered performance late into 2019.
Notably, profitability levels on two rail projects was a lot lower than what was expected which also contributed to the disappointing update on Tuesday.
The firm said that it expects to report revenue for 2019 of £15.8 million, down 21% from £20.0 million a year earlier, and down 8.7% compared to market expectations of £17.3 million. In 2018, Petards generated a pretax profit of £1.1 million.
Raschid Abdullah, Chairman of Petards Group plc said:
“While it is disappointing to report on the lower than expected 2019 revenues due to customer re-scheduling and on the impact this and the higher project costs have had on profitability, the Group remains in good shape.
“Following the Group’s significant investment in recent years, and with little further investment in product development anticipated to be required in 2020, the Group expects to be net cash generative in the coming year and the Board remains confident of the Group’s future prospects.”
Petards slump in 2019
In September, the firm posted a profit warning and regression in their financial results following a slow first half to the year. The Company’s order book slid down from £19 million to £15 million year-on-year during the first half, which led a dip in revenues to £8.9 million, down 8% on-year. Owing to their sales performance, the Group’s adjusted EBITDA narrowed from £1.085 million, to £0.766 million. Additionally, the Company’s pre-tax profit folded from £0.514 million to £0.206 million and their cash position swung from £1.0 million net cash to £0.7 million net debt. Petards will have to address the issue sooner or later, as shareholders will be concerned that share prices have effectively sunk.British Pound slips to a six week low following PM Johnson’s Brexit stance
The British Pound fell to a six week low against a stronger dollar on Tuesday morning, as PM Johnson looked to reinforce his deal on terms of Brexit withdrawal.
Since the historic decision was made on Friday, the Pound has been up and down over hopes that Boris Johnson could finally deliver his December election promise.
Brexit had been dominating British news headlines since June 2016, when on a Friday morning the final results of the referendum had concluded that Britain would be terminating their relationship and ties with the European Union.
After years of toil, strife and elections the deal has finally been passed in both Westminster and Brussels, however the British Pound has not taken to this too well.
Yesterday, it was reported that the EU and Britain had not seen eye to eye over a post Brexit deal, as the two parties laid out very different strategies for UK-EU relations going forward.
On Monday, the Sterling lost 1% against the Dollar and the Euro and this had continued to decline across Tuesday morning.
Notably, the Pound slipped 0.4% against the dollar, to $1.2942, whilst being matched up against the Euro the slip was slightly less. The Pound dropped 0.3% versus the Euro to 85.35 pence, which saw its weakest since January 21st.
Britain and the EU still have a long road ahead, indeed nine months of negotiations are set to take place where every policy, detail and fragment will be thoroughly scrutinized before a final withdrawal agreement is reached.
PM Johnson has reinstated his intentions to not bow down to the needs of the European Union, and has told the British public that the withdrawal bill will be done on the terms of British politics and British needs – a rather risky approach when you consider that the EU hold the high hand.
The EU has warned Britain that access to the Single European Market will depend on how much Britain can work with the EU to reach a ground which benefits both parties.
“Despite Brexit being officially delivered, for markets, this is not the case,” analysts at RBC Capital Markets said in a note.
“While the two documents released (by the UK and EU) should clearly be seen as an opening gambit only, it drives home the point that reaching an agreement in a quite short span of time appears ambitious and might harbour some downside risks to the UK economy (and assets as well as sterling) as the year progresses.”
British Politics enters a very interesting time, and we could be entering a year full of stops and starts. The British Pound will also see sprites of confidence and periods of bruising, however traders will remain cautious.
Ryanair report passenger growth in January as 2020 starts strong
Ryanair Holdings PLC (LON:RYA) have seen a rise in passenger traffic in the first month of 2020.
The firm also praised the growth of its spin off Australian firm Lauda, which has seen strong growth over the last few months.
The budget airline told the market that total traffic for January totaled at 10.8 million passengers, which sees a 5% climb from the 10.3 million figure just one year ago.
The rise was driven by the performance of Lauda, which saw a 67% rise in passenger figures from 300,000 to 500,000. Additionally, Load Factor was 91% – another impressive stat to take for shareholders.
Looking at the core Ryanair brand – the firm saw traffic rise by 3% from 10 million to 10.3 million, with a 92% load factor figure.
The airline’s group load factor for January came in at 92%, up from 91% in the same month in 2019 but below its rolling annual figure of 96%, which was one sour note from today’s update.
Look at a rolling annual scale, total traffic rose 8% to 152.9 million compared to 141. million year on year, and the firm told the market that it operated more than 62,000 flights in January.
The update comes today following an impressive trading update which hit the market yesterday.