Tekcapital has secured additional growth capital from an investor as the investment company gears up for the IPO of its portfolio company, Guident, later this year.

A single investor who invested in a placing last year has increased their stake in Tekcapital by making a further £500,000 investment in the company at the current market price. The placing is notable because the investor was happy to commit a sizeable amount without demanding a discount on the market price.

Many small-cap companies are forced to raise funds at substantial discounts to garner investor interest. The terms of today’s capital raise are a major vote of confidence from an investor who has previously invested in the company.

The investment will provide Tekcapital with further growth capital ahead of Guident’s proposed IPO later this year. Guident recently appointed an investment banker for a potential NASDAQ IPO as the autonomous vehicle sector heats up.

“We are very grateful for the support of one of our existing shareholders who invested in a placing last year and who is keen to increase his investment in the Company,” said Clifford M. Gross Ph.D., Executive Chairman of Tekcapital.

“This is an exciting time for our Company, with three portfolio companies now trading on AIM, one trading on the NASDAQ, and as announced recently, our fifth portfolio company Guident planning a listing in the US.”

The FTSE 100 is set to close at its highest-ever level as the UK’s leading shares soared on hopes of interest rate cuts later this year. The stabilising bond market also helped lift sentiment, and the FTSE 100’s weighting towards natural resources benefited from M&A chatter.

“After years of trying, and failing, to play catch up, the FTSE 100 appears to have finally caught the ball of investor enthusiasm,” Susannah Streeter, head of money and markets, Hargreaves Lansdown declared.

Traders are upping their bets on interest rate cuts by the Bank of England this year after disappointing UK retail sales, which provided further evidence that the UK economy needed support from central bankers in the form of lower borrowing costs.

Bad news for the UK economy proved good news for the FTSE 100, which rose over 1% to trade at 8,477 at the time of writing. The rally meant London’s flagship index was on course to close at a fresh record high above the current record of 8,445. The index printed a new intraday record after trading above 8,474.

“The FTSE 100 has hit a new record high despite all the doom and gloom around Budget-related cost pressures on businesses and a sell-off in the government bond market,” said Dan Coatsworth, investment analyst at AJ Bell.

“It’s refreshing to see positive news around the UK stock market given its unloved reputation.

“Helping to drive the index up more than 1% and above its previous intraday record of 8,474 in May 2024 was a further slump in the pound as retail sales came in below expectations for December.

“Three quarters of companies in the FTSE 100 generate their earnings overseas, and the relative value of those foreign earnings is boosted when the pound weakens.”

Mining shares were front and centre of Friday’s rally after news emerged Rio Tinto and Glencore were exploring a merger which would create one the world’s largest mining companies and be the biggest mining transaction in history. Murmurings of M&A inevitably fired up the sector with shares in Antofagasta, Anglo American and Glencore all rising more than 2%.

“Glencore is one of London’s most traded stocks this morning following speculation of a tie-up with Rio Tinto. Trading volumes for fellow miner, Anglo American, which rejected a bid from BHP last year, are also strong,” said Derren Nathan, head of equity research, Hargreaves Lansdown.

The hopes of lower interest rates translated into stronger UK housebuilder shares. Persimmon continued its rally, adding a further 2% to a strong rally sparked by an upbeat trading statement released this week. Taylor Wimpey rose 1%.

Analysts suggest there may be renewed interested in the defensive FTSE 100 ahead of Donald Trump’s inauguration next week.

“Although fresh volatility is expected on global markets after President Trump returns to the White House, there may be more appetite to shelter in the resilience of the UK market, and benefit from stocks which have seen depressed valuations in recent years,’’ Susannah Streeter said.

IG Design Group shares halved on Friday after issuing a stark trading update revealing significant challenges in its US market operations through December 2024 and into early 2025.

The company’s American division, DG Americas, has been particularly hard hit by ongoing turmoil in the US retail sector. This week, their fourth-largest customer filed for Chapter 11 bankruptcy protection, prompting IG Design’s DG Americas division to set aside provisions of approximately $15 million to cover potential losses from outstanding receivables and associated inventory.

IG Design Group shares were down 55% at the time of writing.

The situation has been further compounded by disappointing Christmas season sales across their product categories. Multiple retail partners are now scaling back or postponing their forward orders, which is adversely affecting revenue projections, production schedules, and cost management.

In response to these challenges, the company has recently appointed Sue Buchta as the new CEO for DG Americas. Buchta, who brings extensive experience from the consumer products industry, will focus on implementing a comprehensive turnaround strategy aimed at restoring the division to profitable growth.

The company now forecasts overall group revenue for the financial year ending March 2025 to fall approximately 10% below the previous year’s figures. DG Americas is expected to see a significant decline of around 13%, while DG International is projected to contract by approximately 1%.

Investors will be upset with the revision of profit expectations, with the group now anticipating to break even for the full year—a substantial departure from current market expectations of $32.0 million.

European stocks were on the front foot again on Thursday as falling borrowing costs and optimism around a cease-fire in the Middle East propelled sentiment higher. Strong earnings across Europe also played a part in boosting the mood.

After the FTSE 100 looked like it was going to break lower and possibly test 8,000 just a few days ago, a lower inflation reading yesterday reset interest rate expectations and raised hopes pressure on the economy would start to ease.

The gloom present in financial markets at the start of the year has been replaced by quiet optimism. That said, slower than expected UK GDP is a reminder of the job the government has on its hands to support UK growth.

Contributing to equity market buoyancy, bond yields were steady again on Thursday, signalling concerns about the UK’s fiscal health was easing. 

“Investors were in a risk-on mood after a ceasefire deal between Israel and Hamas and a positive response to corporate results in the European retail, luxury, and automotive sectors,” said Russ Mould, investment director at AJ Bell.

“The Dax briefly hit a new record high as investors raced to buy shares in German e-commerce platform Zalando after it said full-year earnings would beat previous guidance. Strong customer growth paints a very different story to the UK retail market where shopkeepers are finding life hard in the wake of cost headwinds and an uncertain consumer backdrop.”

Rightmove was the top riser at the time of writing on hopes home buyers would jump at the chance of lower mortgages.

Experian added 2% following yesterday’s strong trading update and a broker price target increase.

Housebuilders gave back some of yesterday’s gains following an update from Taylor Wimpey. Taylor Wimpey was unable to create the feel-good factor Vistry and Persimmon did with their latest updates. Taylor Wimpey’s average selling price was not as strong as their peers and completions fell.

This hit the whole sector on Thursday, but Taylor Wimpey was the biggest casualty, giving up 4%.

Whitbread shares also suffered following the release of a trading statement highlight slowing UK sales.

“Hotel giant Whitbread checked in with a mixed third quarter update, showing a 3% dip in UK revenue but hints of recovery as hotel performance steadied, said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“Premier Inn continues to shine as the group’s flagship, but challenges loom with weak UK hotel prices and a sluggish German economy potentially slowing expansion plans. While resilience is evident, Whitbread will need to keep Premier Inn leading the pack to weather an uncertain market.”

Taylor Wimpey shares fell on Thursday after it released a full-year trading statement that could be considered a disappointment compared to its peers.

Taylor Wimpey has reported a slight decrease in completions for 2024, with total Group completions including joint ventures slipping to 10,593, down from 10,848 in 2023.

Persimmon recently reported a 7% increase in completions in 2024.

Average private sale prices fell to £356k from £370k in the prior year. However, the company saw improved sales momentum, with its UK net private reservation rate increasing to 0.75 homes per outlet per week, up from 0.62 in 2023.

The company ended 2024 with a robust order book valued at £1,995 million, representing 7,312 homes, an increase from £1,772 million and 6,999 homes in 2023. Despite this growth, the company noted weaker pricing in Southern England, with the order book showing underlying pricing approximately 0.5% lower year on year.

In terms of land investment, Taylor Wimpey significantly increased its land approvals to around 12,000 plots in 2024, up from approximately 3,000 in 2023, partly due to increased market opportunities before the Budget. The company maintains a substantial short-term landbank of about 79,000 plots and a strategic land pipeline of roughly 136,000 potential plots.

Looking ahead to 2025, Taylor Wimpey reports encouraging early enquiries but remains cautious, noting that growth in volumes will depend on mortgage rates and their impact on affordability.

The company also warned of increased build cost pressures resulting from the recent UK Budget. Despite these challenges, Taylor Wimpey expressed confidence in the sector’s long-term fundamentals and its position to address UK housing undersupply.

“Volumes aren’t expected to ramp up massively in the near term, and there has been some softness in the average selling prices of its houses at a time when some of its peers are seeing modest rises,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.

“Taylor Wimpey also called out that the recent UK Budget is likely to increase build costs this year, putting some pressure on margins. With the current economic uncertainty, there’s likely to be plenty of ups and downs in the short term. But for investors looking for exposure to the sector at an attractive valuation, and a nice income stream while they wait for a recovery, Taylor Wimpey looks like a strong choice.”