AI-focused investment firm Mindflair still trades at a significant discount to NAV despite the realisation of an investment representing 50% of their market cap.

Mindflair is another example of London’s inability to value technology-related companies properly.

The company delivered very respectable full-year results with net asset value surging 85% to £10.8m and income swinging to £3.2m profit compared to losses of £2.7m in 2023. The turnaround was driven primarily by the strong performance of its Sure Valley Ventures investments, particularly the valuation increase in Infinite Reality.

Many of Mindflair’s investments are privately held, which may explain some of the discount to NAV. But 50% seems like too much of a disconnect.

Mindflair’s NAV per share of 2.05p at the end of the period compares to a current share price of 1p, which is surely an unfair assessment by the market as to the outlook for their portfolio.

The sale of their holdings in Getvisibility, generating £2.6m, is a validation of their strategy and investment selection capabilities.

Portfolio activity was particularly active, with Mindflair benefiting from the disposal of Landvault to Infinite Reality for US$450m headline consideration in July. They made six new investments through SVV2 and initiated activity in SVV3 with stakes in Inspeq AI and Jentic AI.

Mindflair offers both value and diverse exposure to AI adoption.

The FTSE 100 was firmly higher on Thursday as investors reacted to Shell’s statement on BP takeover speculation and London played catch-up with US equities.

“A sense of calm has descended on markets this morning as high-stakes drama on the global stage took the night off,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

London’s leading index rose 0.5% as UK stocks rose in line with a move to the upside in US stocks. Nvidia hit records overnight and became the world’s largest company, overtaking Microsoft, as the NASDAQ hit record highs. The S&P 500 is within touching distance of record highs.

London received an additional boost to sentiment in the form of M&A hopes as reports emerged Shell was eyeing up BP, only for Shell to shut any speculation down via a statement issued on Thursday. Nonetheless, takeover talk gripped the market and investors piled into natural resource companies that may be targets for a bid.

“Speculation last night around a BP bid effectively set the stage for the UK stock market to rocket today. Instead, Shell has spoiled the party and the blue-chip index is static,” said Russ Mould, investment director at AJ Bell.

“That won’t stop the market from continuing to speculate about who else might want to buy the FTSE 100 energy giant. It might also encourage investors to dust off the M&A playbook and think about who else could be a takeover target. That might explain why Anglo American’s shares were among the top risers on the FTSE today.”

Anglo American was 5% higher at the time of writing. Glencore and Antofagasta rose over 3%.

Anglo American has been the subject of takeover speculation and approaches for some years, recently spinning off a business unit to help fight off future interest. The FTSE 100’s weighting towards miners meant a hint of M&A fever in the sector helped lift the index.

A mild risk-on tone to trade had developed in afternoon trade with retailers, miners and financials leading the way higher.

British American Tobacco was the FTSE 100’s top faller after trading ex-dividend.

Bitcoin treasury shares fell on Thursday after The Smarter Web Company completed an accelerated bookbuild raising approximately £41.2 million, significantly exceeding its £30 million target.

The firm issued 14.2 million new shares at 290p each through institutional investors via Tennyson Securities and Peterhouse.

The company plans to use the funds for organic growth around existing services and an acquisition strategy to accelerate scale. It will also use the cash to fund further bitcoin purchases.

Today’s placing follows a series of fundraising efforts by the company, including a recent issue of shares at 495p that raised £3.8 million.

The Smarter Web Company shares were trading at 255p at the time of writing, below the accelerated bookbuild price of 290p and around 50% below recent highs of 500p.

The decline in The Smarter Web Company shares sparked a wave of selling across companies that have raced to adopt Bitcoin treasuries after Smarter Web blazed a trail following their recent IPO.

Vinanz, Pri0r1ty Intelligence, Sundae Bar, TAO Alpha, GSTechnologies, Cel AI, and Cykel AI were all down heavily on Thursday.

When helium and metals exploration companies such as Mendell Helium and Panther Metals announce they are adopting Bitcoin treasury policies, you have to question the motivations behind the decisions to diversify their balance sheets into cryptocurrency and whether some of the sharp share price gains recorded after announcing BTC treasuries are justified. Time will tell.

Incidentally, Mendell Helium was a cannabis company up until last year and has made the remarkable pivot from a company focused on cannabis and hemp to a helium explorer with a Bitcoin treasury. The company hasn’t announced meaningful revenues from either the cannabis or helium businesses.

With Bitcoin prices remaining steady at around $100,000, the companies that have adopted a Bitcoin treasury in recent weeks have yet to make any material gains from their Bitcoin purchases.

Many of the companies adopting Bitcoin treasuries are still working towards achieving steady revenue streams and will require cash to fund operations. They will be quids in if the Bitcoin price rallies, but their growth plans could be curtailed if the price falls.

Made Tech, the provider of digital and technology services to UK government departments and local councils, has delivered growth that exceeded market expectations for the year ending May 2025.

Shares were 17% higher after the group announced revenue of approximately £46.4 million, up 20% from £38.6 million the previous year. Adjusted EBITDA jumped to £3.4 million compared to £2.4 million in 2024 – a 42% increase that lifted margins from 6.2% to 7.3%.

Made Tech’s results have surpassed analyst forecasts that had already been upgraded earlier this year.

The group is benefiting from the government’s approach to digital transformation and the drive to improve internal systems with the help of companies such as Made Tech.

Sales Bookings Surge 128%

The standout metric was new sales bookings, which soared 128% to £82.1 million from £36.0 million. Made Tech secured major contracts, including an £8.4 million three-year deal with the Ministry of Justice’s Legal Aid Agency, alongside multiple smaller agreements with the Department of Health and Social Care.

The new contract win has built a substantial contracted backlog of £92.0 million, up from £60.6 million previously, providing strong revenue visibility for future periods.

The company’s balance sheet remained robust with net cash of £10.4 million – a 37% increase from £7.6 million. Made Tech continues to operate debt-free.

“I’m pleased with the progress we’ve made this year, delivering strong revenue growth, improved profitability and continued free cash flow generation. Investment in our sales and bid capability is starting to deliver, with a step change in bookings and a significantly larger Contracted Backlog,” said Rory MacDonald, Chief Executive Officer.

“The UK Government’s renewed focus on digital transformation and data as a growth asset through the recently announced Spending Review, the State of Digital Government report, the UK’s Modern Industrial Strategy and the Strategic Defence Review has reinforced a growing long term market opportunity with clear demand for modern digital technology and the potential for sustained returns.”

Shell has addressed recent reports suggesting they were lining up an offer for BP with a statement issued on Thursday squashing speculation of a mega deal.

Shell said in a statement:

‘In response to recent media speculation Shell wishes to clarify that it has not been actively considering making an offer for BP and confirms it has not made an approach to, and no talks have taken place with, BP with regards to a possible offer.’

The oil major continued to say it ‘confirms it has no intention of making an offer for BP’.

There has been little market reaction to the media reports or Shell’s subsequent statement. BP shares were flat at the time of writing on Thursday.

The deal, should it hypothetically go ahead in the future, would be one of the biggest M&A transactions between London-listed companies in history. It would also further reduce the number of major global companies listed in London by combining two of them at a time when London is struggling to maintain its appeal to multinational companies.

“Shell has denied media speculation of early talks to buy rival BP. Structurally lower oil prices are causing the majors to look at their options, but given Shell’s superior asset quality and balance sheet, any combination may be difficult for its shareholders to stomach,” said Derren Nathan, head of equity research, Hargreaves Lansdown.

“Cherry picking some flagship assets could be another option, but that’s unlikely to satisfy BP investors. For now, the focus for Shell is likely to remain on buying back its own shares.”