KEFI Minerals ponder finance options for Tulu Kapi operations

Ishen Patel
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KEFI Minerals ponder finance options for Tulu Kapi operations

KEFI Minerals plc (LON: KEFI) are pondering their current options on how to finance their Tulu Kapi project on Monday afternoon.

Shares in KEFI Minerals crashed 7.99% on Monday to 1.46p. 25/11/19 13:04BST.

Earlier this month, KEFI saw their shares rally 55.11% after conflicts were resolved with regard to internal internal administrative arrangements in Ethiopia.

The fact that this dispute was resolved gave KEFI the green light to pursue operations in the Tulu Kapi project, and now seniority are planning the funding arrangements.

Outlines of the project and the brand were provided at the UK Investor Magazine Summer Investor Event on July 18th.

Nicosia, Cyprus-based KEFI now has two options: a long-standing bond-lease based package or a conventional bank-project finance proposal from African banks.

The firm said the company operating the project, Tulu Kapi Gold Mines Share Co, has recently been offered a bank-based project finance proposal, which would be an alternative to bond-based financing.

The emergence of this alternative funding reflects the improved outlook for Ethiopia and of the project in light of progress on the ground. The two proposals (bond-based and bank-based) have their own relative merits,” said KEFI.

A decision will be made shortly, the company said.

The Ethiopian government has pledged to invest $20 million into the project, and KEFI’s partner firm ANS Mining Share Co will invest $38 million.

These initial investments, KEFI said, are now subject to the normal administrative requirements. They also rely on off-site infrastructure being completed and independent assessments being updated.

Harry Anagnostaras-Adams, executive chair of both KEFI and TKGM, said: “I am delighted the project has reached this stage, after so many delays and setbacks as the country and the sector were going through quite an amazing change. We have shared the frustrations of our shareholders and our partners, but I now believe the project has encouraging momentum.

“As first mover for modern mining in Ethiopia, we have done the heavy lifting with the authorities and the community and we can now all share the benefits as we advance. It is especially pleasing to see the strengthening of capital market interest and support from capital providers both inside and outside the Ethiopia for the project.”

Many firms such as Bluejay Mining (LON: JAY) and Amur Minerals (LON: AMC) have resorted to share placing plans in order to drum up funds to expand operations.

Additionally, Thor Mining (LON: THR) and Hochschild Mining (LON: HOC) have seen their share price become volatile after mixed trading updates.

Restaurant Group shares crash despite strong Wagamama performance

Ishen Patel
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Restaurant Group shares crash despite strong Wagamama performance

Restaurant Group PLC (LON: RTN) have seen their shares crash on Monday, despite a strong performance from subsidiary brand Wagamama.

The Restaurant Group is a leading name in the casual dining market, and boasts a portfolio of over 650 restaurants. The firm owns household names such as Wagamama, Frankie & Benny’s, Chiquito and Brunning & Price.

Shares of the Restaurant Group crashed 5.68% to 137p. 25/11/19 12:43BST.

The FTSE250 (INDEXFTSE: MCX) listed firm reported that Wagamama had continued to outperform the market in tough trading conditions, but this did not seem to be enough to suffice shareholder appetite.

Earlier this year, the Restaurant Group announced the acquisition of Wagamama into its group and this had an immediate effect.

It seems that now the Japanese food branch is the leader for the Restaurant Group as other brands slip from tough retail conditions.

The deal cost the Restaurant Group £357 million to acquire Wagamama, and after skepticism from shareholders the deal was finalized earlier this year.

Including Wagamama’s debt, the deal had an enterprise value £559 million, and Restaurant Group used a £315 million rights issue and a £220 million bank loan for the acquisition.

Wagamama reported strong second quarter gains, as revenues rose 11% year-on-year to GBP93.5 million, with like-for-like revenue growth coming in at 6.3%. Restaurant Group’s own financial year aligns with the calendar year.

Overall, the brand delivered a 5.1% outperformance of the UK market, the company said, and has consistently outperformed over the past five years.

Wagamama Chief Executive Emma Woods said: “Great businesses are built from dedicated people, a commitment to always be on the side of their customers and a galvanising sense of purpose.

“Wagamama has always followed this model, and I am thrilled to say has delivered another quarter of strong outperformance versus the market with a number of record restaurant sales weeks.

“We look forward to 2020, and whilst we don’t expect to be immune to the various headwinds facing our industry, we will stay true to our positive culture and growth mindset,” Woods continued.

The food and drink market has seen mixed results and shares have fluctuated across tough trading conditions.

Established names such as J D Wetherspoon plc (LON: JDW) have seen their shares rally after a period of strong trading.

The performance has not been quite matched by rivals such as Greene King (LON: GNK) and Whitbread (LON: WTB) have been hit headlines of slowing business and takeover bids.

Additionally, Slug and Lettuce owner Stonegate agreed to buy Ei Group (LON: EIG) for £1.27 billion which may give the Restaurant Group further competition.

Despite the strong performance of Wagamama, it seems that the other chains are living off the back of Wagamama success.

Seniority will have to address this issue as shareholders do not seem fully appeased following the stock price crash this morning.

Bacanora shares rally following fund raising announcement

Ishen Patel
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Bacanora shares rally following fund raising announcement

Bacanora Lithium PLC (LON: BCN) have announced that they have raised close to £8 million from one of its headline investors M&G PLC (LON: MNG) which has caused shares to rally.

Bacanora Lithium is a AIM listed lithium development company which holds its main operations in Mexico.

Shares of Bacanora rallied 6.8% to 27p on Monday morning. 25/11/19 12:27BST.

M&G has increased its stake in Bacanora to around 20%, after taking 30.9 million new shares at a price of 25 pence each, raising £7.7 million in total.

Bacanora will use these funds to develop pre-construction work at the flagship Sonora Lithium project in Mexico.

Bulk earthworks are due to start in the first half of 2020, as well as an upgrade to the main access road. Bacanora will also use the funding to place initial orders for some of the longest lead-time items required for the plant at Sonora.

Mark Hohnen, Bacanora’s Chair, said: “Today’s placing, following an inbound request from one of our long-standing institutional investors, M&G, represents in our view an endorsement of Sonora’s potential to become a leading supplier of high-value lithium products to fast-growing industries such as electric vehicles and energy storage.

“It also further de-risks the required funding for the project, that continues to be progressed by our brokers, Canaccord and Citi, and which we are aiming to complete in first half 2020. With our highly supportive strategic partner and leading global lithium company, Ganfeng, undertaking a technical review of the project, we are working hard to ensure we hit the ground running as soon as this work has been completed.”

“By allowing long lead-time items to be ordered and earthworks to commence, the funds raised will enable us to maintain the momentum behind our flagship project,” Hohnen added.

M&G was recently spun off from FTSE100 (INDEXFTSE: UKX) listed insurance company Prudential plc (LON: PRU).

In the minerals and mining sector, Hochschild Mining (LON: HOC) have seen their shares crash following cuts in their annual production guidance.

Sirius Real Estate shares rise on increased pay outs

Ishen Patel
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Sirius Real Estate shares rise on increased pay outs

Sirius Real Estate Limited have seen their shares jump on Monday after the firm boosted its pay outs on the back of strong results.

Sirius Real Estate are an owner and operators of business parks, offices and industrial complexes. They host their main operations in Germany which provide flexible and conventional workspace to companies.

Shares of Sirius jumped 2.7% on Monday to 78p. 25/11/19 12:11BST.

The firm reported that its interim income and assets rose as the firm continued to “flourish” despite uncertain markets.

For the six months ended September, net asset value per share rose 7.3% to 76.18 euro cents from 71.01 cents six months earlier.

Operating income rose 9.4% to €39.5 million from €36.1 million the year before.

Pretax profit widened 1.9% to €79.7 million from €78.2 million the year prior, helped by investment properties revaluation gains rising 3.6% to €58.2 million from €56.2 million the year before.

“Despite political uncertainty and economic headwinds, Sirius’ value-add business model continues to flourish due to the diversity that comes from intensive asset management and our wide range of products,” Chief Executive Officer Andrew Coombs said.

“Occupier demand for both conventional and flexible space remains strong while investor appetite for exposure to the German light industrial market continues to drive yields down,” Coombs added. “Part of this is fuelled by the low rates of financing available, of which we are strongly positioned to take advantage.”

“With significant vacancy in our value-add portfolio and a defensive portfolio gross yield of 7.4%, there remains considerable potential to increase rent roll and capital values,” Coombs continued.

Sirius proposed a 1.77 cents per share interim dividend, up 8.6% from 1.63 cents the year before.

In the market, competitors have seen mixed results.

NewRiver Reit (LON: NRR) have purchased a retail park from rival Intu (LON: INTU) earlier this morning.

Additionally, Growthpoint (JSE: GRT) are close to formalizing a deal for UK based Capital and Regional (LON: CAL) in a reported £150 million deal.

TSB announce lower costs strategy for medium term

Ishen Patel
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TSB announce lower costs strategy for medium term

TSB Bank have announced a new overhaul strategy which centralizes cutting costs and changing strategy following a mixed period of trading across financial 2019.

TSB Bank are owned by Banco de Sabadell (BME: SAB) and have seen a tough year involving an investigation into an IT crash which happened in 2018.

Banco de Sabadell bought TSB in 2015 for £1.7 billion as the Spanish bank looked to make gains in the British market.

The British bank have confirmed that they will close 82 branches next year, which forms 15% of their total branches.

The bank announced a change of strategy and plan to save £100 million in savings by 2022.

On Monday, TSB announced their medium term strategy for 2019-22 saying that the savings would help improve its cost-to-income ratio by 15 percentage points by the end of the plan and that restructuring charges will amount to £180 million pounds.

TSB said it was aiming for a profit after tax of £130-140 million by 2022, from a current breakeven position.

The bank, which will invest £120 million to transform its online channels, expects three quarters of its clients to be digitally active over the next three years.

Ian Gordon at Investec (LON: INVP) said: “Aside from the IT fiasco, it has since faced the challenges of lower-for-even-longer interest rates; a headwind for all UK domestic banks, but a particularly acute one for smaller, sub-scale banks.” He added: “It is hard to make the case for TSB as an independent force in UK banking.”

Today TSB said “customer journeys will be transformed” by “digital-led propositions”. Head-office functions will be “streamlined”.

TSB did not update the market on potential job losses, and employees await a full explanation about the certainty of their occupations.

The global banking industry seems to be in decline, and the strategy by TSB follows a change in plan to turnaround business.

Competitors such as HSBC (LON: HSBA) and Lloyd’s (LON: LLOY) have seen their shares fall after tough trading periods.

Additionally, the crisis at Deutsche Bank (ETR: DBK) continues to unfold as the firm reported a third quarter loss.

NewRiver Reit shares spike following Northern Irish park purchase

Ishen Patel
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NewRiver Reit shares spike following Northern Irish park purchase

NewRiver Reit PLC (LON: NRR) have seen their shares spike on Monday, after the firm announced the purchase of a Northern Ireland retail park for £40 million.

NewRiver Reit is a firm focused on real estate in the retail and leisure property sector, and boasts an impressive portfolio of 29 shopping centers, 22 retail warehouses, 14 high street units and 359 public houses.

Shares in the FTSE250 (INDEXFTSE: MCX) listed firm spiked 1.78% to 182p. 25/11/19 11:31BST.

The firm confirmed the purchase of Lisburn Retail Park for £40 million from property rival Intu Properties PLC (LON: INTU).

The park has 231,000 square foot of retail space as well as 1,200 car park spaces and 18 acres of development land.

The site boasts anchor tenets such as Sainsbury’s (LON: SBRY) and B&Q, owned by Kingfisher PLC (LON: KGF) who have seen their shares slip last week.

We are pleased to announce that we have exchanged contracts to acquire Sprucefield Retail Park,” NewRiver Chief Executive Officer Allan Lockhart said. “This high-quality asset will generate £3.7 million of annualised net property income, which will be highly accretive to underlying funds from operations and significant in improving our dividend cover, which is our key priority.”

“In addition to an attractive long-term income return, the development land offers the opportunity to deliver significant capital growth, leading to a very attractive total return,” Lockhart added.

Intu Chief Executive Officer Matthew Roberts said: “We announced our new strategy at the interim results in July. A key element of this is fixing the balance sheet which includes creating liquidity through disposals. We are pleased to conclude this transaction, which along with the part-disposal of intu Derby and other sundry asset sales in 2019 brings the year to date disposals total to £268 million.”

The sale comes at no surprise as Intu have seen their shares crash following a period of poor trading. Where competitors are making gains, this acquisition will come at a pleasing time for shareholders of NewRiver. In the market rivals have been busy, Growthpoint (JSE: GRT) are close to formalizing a deal for UK based Capital and Regional (LON: CAL) in a reported £150 million deal.

Icing on the cake for Cake Box shareholders

Ishen Patel
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Icing on the cake for Cake Box shareholders

Cake Box Holdings PLC (LON: CBOX) have seen their shares spike on Monday after the firm increased its interim dividend.

Cake Box operate in a niche market which supplies both fresh and egg free cream cakes for all occasions. The firm has hit the ground running following societal trends of increased vegetarian and vegan eating habits.

Shares of Cake Box spiked 5.9% on Monday to 147p. 25/11/19 11:15BST.

Cake Box increased its interim dividend by 33% following positive progress in their interim update.

In June, the firm reported strong profit gains following the opening of new stores across the country, and the interim figures will only put icing on the cake.

Cake Box is returning 1.6p per share for the six months to September 30, up 33% from the 1.2p paid a year before, with cash generation remaining “strong”.

The company’s pretax profit rose 27% to £1.7 million with revenue climbing by 6% to £8.8 million.

Like-for-like sales growth was 6.9%, rising from 4.4% for the same period a year before.

“During the period our focus has been on the consolidation of our strategy as we continue to grow the business through rolling out new stores, improving our customer offer and expanding our customer base, which is attracted to our unique, egg-free proposition,” said Chief Executive Sukh Chamdal.

“Our continued momentum has again led to a good financial performance during the half.”

Nine stores were added to the portfolio during the half, and more will come in the second half of its year.

Since the half’s end trading has been “encouraging”, Cake Box continued, and the company said it is on track for “another” year of growth.

Chamdal added: “With initiatives continuing apace to enhance our product offer, and with strengthened operational capabilities through our new warehouse and distribution facilities, we remain on track for another year of growth.”

Shareholders of Cake Box will be thoroughly pleased with the update and should be looking forward to strong trading figures in the next update.

In the market, competitors such as Finsbury Foods (LON: FIF) and Coca Cola (LON: CCH) have seen their sales increase in their most recent update.

Additionally, big time rival Greggs (LON: GRG) reported strong trading figures a week ago, which causes shares to rally.

Just Eat Takeaway.com saga continues

Ishen Patel
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Just Eat Takeaway.com saga continues

The ongoing saga between Just Eat (LON: JE) and Takeaway.com (AMS: TKWY) continues to take its course, as both firms look to complete a merger deal following internal and market pressures.

Shares of Just Eat were 0.19% to the good on Monday morning, trading at 754p. 25/11/19 11:02BST.

There has been a never ending story between the two firms about completing a merger deal, as the deal first hit news headlines in July.

However, the persistence of Prosus (JSE: PRX) has stopped the two firms agreeing a deal, as Prosus have expressed strong interest in the London based Just Eat.

Just Eat is a FTSE100 (INDEXFTSE: UKX) listed firm, and it is understandable given its size and stature why both Takeaway.com and Prosus are keen on making the acquisition.

In the initial deal proposed at the end of July, Just Eat shareholders would get 0.09744 Takeaway.com shares for each Just Eat share held, which valued Just Eat at 731 pence per share based on Takeaway.com’s closing share price on July 26 of €83.55.

The bid submitted by Prosus showed a 20% appreciation to Takeaway.com’s offer.

On Monday, Just Eat told shareholders to back the deal submitted by Takeaway.com and neglect the substantial £4.9 million bid that was proposed by Prosus.

Takeaway.com Chief Executive Jitse Groen added: “This merger combines the two most profitable European food delivery websites: Just Eat in the UK and Takeaway.com in the Netherlands. We believe it is realistic to expect Germany, which is already more than double the size of our Netherlands’ business, will over time trend towards the Dutch earnings before interest, tax, depreciation, and amortisation margin.

“The strong cash generating capability of these profit pools will continue to fuel the growth of the combination. Our team has a proven ability to win in competitive markets and has defeated numerous competitors in many countries, whether large scale tech giants or well-funded, own-delivery challengers. We remain strongly committed to the merger.”

“Your board believes that the Takeaway.com combination provides Just Eat shareholders with greater value creation than the Prosus offer,” it said in a letter to investors today, reiterating its belief that the Prosus deal “significantly undervalues” the company.

PetroTal shares rally following optimistic production guidance update

Ishen Patel
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PetroTal shares rally following optimistic production guidance update

PetroTal Corp (LON: PTAL) have seen their shares rally on Monday after the firm gave shareholders a positive outlook.

PetroTal reported the completion of drilling at its second horizontal well on the Bretana field in Peru, which gave shareholders optimism on Monday.

PetroTal is an oil and gas development and production company. The firm focuses on development of oil assets and oil fields, and has main operations in Canada.

Shares of PetroTal rallied 20.33% on Monday morning to 25p. 25/11/19 10:46BST.

Following the completion of the Bretana field operation, the firm increased its year-end production guidance which would have appeased shareholders.

The 5H well reached the target Vivian formation at the prognosed vertical depth of 2,696 metres, PetroTal said, and 700 metres of the planned 870 metres horizontal section have been drilled, which is inside the main productive oil reservoir.

The well tie-in and initial production tests are expected to take place within three weeks, and PetroTal have said that they confirm to commission the central production facility following the conclusion of the test.

This will allow the expansion of nominal production facility to 10,000 barrels of oil per day, and 40,000 barrels of water per day.

Based on recent field production experience of production 8,000 barrels of oil per day with a facility having 5,000 bopd nominal capacity, PetroTal expects its central production facilities to be able to handle the order of 15,000 barrels per day.

Following these strong predictions and solid performance, the production guidance has been lifted for the end of 2019 to 11,000 to 13,000 barrels per day.

This shows good progress from the initial 10,000 figure once quoted.

In a time where the oil and gas industry has seen slumps, this will come as good reading for shareholders.

Big name titans such as Shell (LON: RDSA) and SABIC (TADAWUL: 2010) have reported poor trading figures in their respective updates.

Additionally, both Nostrum Oil (LON: NOG) and Chariot Oil (LON: CHAR) have seen their shares dip following revenue shrinks.

“We set ourselves an ambitious target of achieving 10,000 bopd by year-end 2019, so to exceed this is of great testament to the team we have assembled. I would like to congratulate our operations and drilling team for executing at an extremely high level since we started operations two years ago, and showcasing that we can handle more oil than the equipment’s nominal capacity which is now allowing us to forecast higher 2019 exit oil rates and, importantly, a strong production base as we enter 2020,” said Chief Executive Manolo Zuniga.

The top end of the London property market

Dina Caruso
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The top end of the London property market
Data revealed on Monday the prime streets in London where buyer activity remains “robust”. The findings are set against the backdrop of a wider property market freeze amid an uncertain political climate as the nation prepares to depart from the European Union. The London lettings and estate agent Benham and Reeves took a look at property sales between the £3 million and £10 million range, as well as those amounting to £10 million and over, over the last year. The findings reveal the capital’s popular high-end streets and how much home buyers are paying to live there. According to the data, the prime market saw a total of 917 sales across the city with an average price paid amounting to £4.5 million, and with sales totally £4.1 billion. Southwark’s Blackfriars Road was the most highly sought after area in the prime market, receiving 51 sales over the last year totalling £227.5 million. Bishops Avenue and Chiltern Street both came second, with 13 sales. As for London’s super prime market, there have been 79 sales in total over the past year, at an average of £17.2 million per sale. Sales in this market total £1.4 billion worth of property. “The continued political and economic uncertainty caused by our prolonged departure from the European Union has had an impact on buyer sentiment across London’s high-end market, and we’ve seen this caution lead to a fall in transactions and a decline in the price achieved during a sale to a certain extent,” Managing Director of Benham and Reeves, Anita Mehra, commented on the data. “However, to have seen as many as six sales transact over the ten million pound mark on one street alone is proof that London remains one of if not the most desirable market in the world, despite this tougher landscape,” Anita Mehra continued. “In addition to this, it seems as though we have very much seen the bottom of the market over the last few months and there has already been a notable uplift in buyer and seller activity which is already stimulating the prime and super-prime markets.”
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