Petrofac shares rise despite cash requirements

Andrew Hore
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Petrofac shares rise despite cash requirements

Shares in energy infrastructure services provider Petrofac (LON: PFC) have risen 26% to 21.44p on the back of news that it is considering how to strengthen the balance sheet. It requires short-term liquidity, while it tries to satisfy the orders it has won. Anticipated cash inflows are not likely to happen this year.

Aidan de Brunner has been appointed as a non-executive director and he will focus on engaging with finance providers and investors as part of a review of strategic and financial options.

There have been $5.5bn in new awards this year, but that has put a strain on the balance sheet. The financial covenant that requires more than $75m of liquidity at the end of each month has not been broken.

Management is focusing on collecting debtors and unwinding working capital. There have been delays in securing advanced payment guarantees.

The sale of non-core assets is one way of raising cash. Financial investors may take a non-controlling stake in some parts of the business.

The share price has fallen by more than two-thirds so far this year and it more than halved last month. There will be a pre-close trading statement on 20 December.

AIM movers: Another positive trading statement from Cornerstone FS and Bezant Resources fundraising

Andrew Hore
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1
AIM movers: Another positive trading statement from Cornerstone FS and Bezant Resources fundraising

Payments services provider Cornerstone FS (LON: CSFS) is the best performer on the day after another positive trading statement. The share price jumped 28.3% to 14.75p. The pre-tax profit forecast has been upgraded from £100,000 to £700,000 with £1.2m forecast for 2024. Cornerstone FS should move to a net cash position during 2024. The number of customers and average value of transactions continues to increase.

Heart monitoring systems developer Deltex Medical Group (LON: DEMG) says testing of its TrueVue monitor has gone to plan and the first sale was in November. There are further orders that will be fulfilled in the next few months. Annualised costs have been reduced by £1m. The number of directors is being cut by a net two people after the appointment of non-exec Ben Carswell. The share price recovered 19.4% to 0.185p.

ITM Power (LON: ITM) says interim revenues will be £7.5m and net cash was £253.7m at the end of October 2023 and there should be more than £175m left by the end of April 2024. The electrolyser technology developer has focused on delivering products to clients and reduced spending. The cash outflow will slow next year. The share price is 12.9% to 58.21p.

US-based Spectra Systems (LON: SPSY) is acquiring security printing business Cartor for up to £10.5m in cash and shares, plus £4.5m of low or zero coupon debt. Spectra Systems can use Cartor to help market its Fusion polymer banknote technology. Cartor made a 2022-23 pre-tax profit of £440,000, held back by polymer investment, but it is expected to recover to around £1m this year. The business is well-invested. The Wolverhampton facility is not included in the purchase and a 20-year lease has been taken out with annual rent of £500,000. There are tax losses of £1.9m. The share price increased 8.76% to 192.5p.

Berenberg has raised its target share price for subsea equipment rental company Ashtead Technology (LON: AT.) from 500p to 700p. This follows last week’s acquisition of ACE Winches for £53.5m. ACE Winches provides equipment to support installation and maintenance of offshore energy infrastructure and it has a significant rental fleet. The share price improved 1.68% to 604p.

FALLERS

Copper gold explorer Bezant Resources (LON: BZT) raised £800,000 at 0.025p. The share price slumped 24.3% to 0.0265p. This will finance the Namibian Hope & Gorob project, where the company is waiting to be issued a mining licence. Drilling is planned to increase the 15.2Mt mineral resource.

Fusion Antibodies (LON: FAB) reports a 71% decrease in interim revenues to £541,000, but management is positive about prospects due to recent contract deals. The share price soared last week on the back of the collaboration with the US-based National Cancer Institute in the use of its OptiMAL technology in the discovery of antibodies for specific cancer targets. The share price slipped 19.2% to 4.75p, which is still 37.7% higher than five days ago.

ITM Power reaffirms full-year guidance, shares jumps

UK Investor Magazine
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23
ITM Power reaffirms full-year guidance, shares jumps

ITM Power shares rose on Monday after reaffirming their full-year guidance as the green hydrogen company delivers on a 12-month plan to reduce costs and streamline the business.

ITM Power shares were 9% higher at the time of writing.

The hydrogen energy storage company said that unaudited results for the six months to 31 October 2023 show revenues came in at £7.5 million, keeping ITM well on track to meet full-year guidance of between £10-18 million.

Additionally, ITM reported an adjusted EBITDA loss of between £22-23.5 million for the first half, trending favourably against the lower end of its full-year expectation of £45-55 million.

ITM Power closed the six-month period with a net cash position of £253.7 million. This comes against full-year guidance of £175-200 million, with a total first half cash outflow of £28.8 million. The company said this reflects significant progress made over the first half of its 12-month plan.

ITM Power has made disposals and reduced head to help cut costs as it expands globally, including its recent entry into the US market.

Dennis Schulz, CEO ITM, commented:

“We have been making substantial progress against our 12-month plan, which aimed at providing ITM a strong foundation to build on. The first 6 months of the financial year from May to October already paint the early picture of a new ITM, surpassing the full year revenue of each of the last two years by about 50% in just the first half of this year.

“We are pleased with the improvements achieved across all areas of the company, many of which have a positive effect on how we manage cash and scrutinise capital spend. We look forward to providing a detailed update on our 12-month plan which is nearing successful on-time completion in January, and to giving insight into our longer term strategic priorities at the time of our interim results.”

Today’s trading update was issued ahead of its interim results due on 31st January 2024.

Share tip: a blue-chip utilities pick for 2024 promising decades of growth

UK Investor Magazine
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0
Share tip: a blue-chip utilities pick for 2024 promising decades of growth

When the economic going gets tough, the defensive utility sector gets going.

By no means are we predicting a recession, but many economists are predicting a tougher environment for some company earnings in early 2024.

Such environments are conducive to positioning in counter-cyclical sectors such as utilities. We have selected one such FTSE 350 stock for consideration.

This is the type of share you add to an ISA or SIPP, activate the reinvestment of dividends, and revisit in five years.

Before we go any further, we must stress that this company may offer better value at sli...

Premier African Minerals: is it now time to buy?

UK Investor Magazine
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0
Premier African Minerals: is it now time to buy?

Premier African Minerals shares have suffered a punishing pullback since the company said they would miss a series of production targets that will ultimately result in financial penalties.

Compounding the problems for PREM shares, investors have grown increasingly uneasy with the company’s messaging and lack of clarity about their ability to meet future lithium production requirements.

We recently highlighted the conflicts between Premier African Minerals’ official RNS releases, CEO interviews, and comments by their mine construction contractor on social media.

Our article, ‘Premier African Minerals shares: proceed with caution’, can be read here.

In an RNS released on 3rd November, Premier said the Zulu lithium plant was facing several ‘challenges’, only for the leader of the mine construction contractor, Stark, to post on social media platform X that “there is no issue on the plant.”

There were problems with the plant, and the Stark CEO has since deleted his X account.

It all got a little murky and certainly wasn’t a situation many investors, understandably, wanted to be involved in. Premier African Minerals’ share price has since sunk and traded at the lowest levels since early 2022 last week.

Looking past the mixed and opaque communications debacle, Premier African Minerals is in a difficult financial position. Many questions about cashflows and further dilution remain unanswered. The company said they will likely miss lithium production targets under a revised offtake agreement and face financial penalties.

Investors will be unsure how many monthly targets will be missed and how Premier will satisfy the penalty payments. It may be in freshly issued Premier African Minerals shares, diluting existing investors.

Markets hate uncertainty, and until certainty is provided, Premier African Minerals shares will likely trade with a bearish bias.

With a bearish bias established in Premier African Minerals shares and an absence of clarity on the fundamentals, potential buyers will have to rely on technical analysis to gauge a sensible entry point.

Adventurous investors prepared to accept much higher than average levels of risk may look to the 0.2p level as an interesting entry level.

This has provided a level of support going back to 2021 where analysis of Premier’s market profile shows the stock is happy to reside. This may act as a magnet for the price.

Should support be found above 0.2p, Premier African Minerals could form a nice double bottom and rebound.

If 0.18p-0.2p is broken, 0.1-0.15p is very much on the cards. It is a gamble at best without further certainty.

Concurrent Technologies growth accelerates

Andrew Hore
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0
Concurrent Technologies growth accelerates

Ruggedised plug-in cards and systems developer Concurrent Technologies (LON: CNC) is stepping up its rate of growth. This will enable full year pre-tax profit to recover strongly, getting near to 2021 levels.

A trading update by the AIM-quoted company confirms that revenues are growing faster than expected. There has also been an easing of component supply problems. Defence is an important sector.

Revenues are expected to be £29.5m, compared with £27m previously. A return to dividend payments is expected this year with 1p/share forecast.

Cavendish forecasts a 2023 pre-tax profit of £...

Tip update: Transense Technologies still has strong prospects

Andrew Hore
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0
Tip update: Transense Technologies still has strong prospects

Investors were nervous after the AGM statement of AIM-quoted Transense Technologies (LON: TRT), which revealed that there had been a slower than expected start to the financial year. However, management remains confident about the full year outcome.

The share price fell back on the day of the AGM and even though it did recover it was still 4.9% lower on the week at 97.5p. This underestimates the cash generative abilities of the company.

So far this year, revenues have improved by 13%, even though iTrack mining truck tyre sensor royalties have not grown as fast as expected. There were fl...

Aquis weekly movers: Valereum returns from suspension

Andrew Hore
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1
Aquis weekly movers: Valereum returns from suspension

Oscillate (LON: MUSH) says all directors will receive their salaries in shares from the beginning of 2024. They will be issued at the mid-price on the day before the payment. Executive director Steven Xerri bought 6.29 million shares at 0.42p each, taking his stake to 7.8%. The share price jumped by two-thirds to 0.5p, which is the highest it has been since August.

Valereum (LON: VLRM) shares resumed trading on 27 November. The Gibraltar Stock Exchange acquisition is not going ahead. The convertible loan note funding facility has been terminated. Warrants will be cancelled, and the company will seek to ensure that the shareholder register is accurate. Accounting records will be audited. Karl Moss has been appointed finance director. The share price recovered 21.3% to 4.5p.

Aquis Exchange (LON: AQX) says that the Aquis Stock Exchange has become the first recognised investment exchange to run on a cloud-based engine, which determines trades. The share price is 5.8% higher at 365p.

KR1 (LON: KR1) had an NAV of 56.14p/share at the end of the November 2023. The digital assets generated income of £395,437. The share price rose 5.26% to 70p.

FALLERS

Vulcan Industries (LON: VULC) has finally published its accounts for the year to March 2023. The loss was £1.02m, although there was also an extraordinary profit of £1.59m on discontinued activities. The loss-making businesses have been sold. The company is moving into renewables. The share price has fallen 64% to an all-time low of 0.135p.

Guanajuato Silver (LON: GSVR) is withdrawing from the Aquis Stock Exchange at the end of 2023. It does not believe it can justify the cost of this quotation, which was gained on 25 October 2022, and the TSX Venture Exchange listing. The share price fell 13.5% to 16p. A deal has been signed to terminate the obligation to make contingency payments of $2m to Great Panther in return for offsetting a working capital adjustment owed to the company. The share price slumped 13.5% to 16p.

Marula Mining (LON: MARU) has commenced phase one exploration at the Nyorinyori and NyoriGreen graphite projects in Tanzania. The focus is the high-grade and jumbo flake graphite mineralisation, which is thought into extend in the NyoriGreen licence. The initial findings should be reported in January. Ore commissioning at the new ore sorter at the Blesberg lithium and tantalum project in South Africa should be completed at the end of January. The expanded processing plant should be commissioned in the first quarter of 2024. The share price is 10% lower at 11.25p.

Coffee shop owner Cooks Coffee Company (LON: COOK) reported flat continuing revenues of NZ$2.04m and it has gone from a pre-tax profit of NZ$125,000 to NZ$319,000. There was a NZ$5.27m loss on discontinued operations. In October, there were record sales per store. A regional developer has been appointed to increase the number of stores in southwest England. By March, Cooks Coffee expects to have up to 80 Esquires outlets in the UK and Ireland by March. Oberon Capital has been appointed corporate adviser. The share price declined 6.25% to 3.75p.

AIM weekly movers: VELA option exercise

Andrew Hore
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0
AIM weekly movers: VELA option exercise

Vela Technologies (LON: VELA) shares jumped 83.9% to 0.0285p on the news that it has exercised the put option to sell the interest in AZD1656, which relates to a Covid application, to Conduit Pharmaceuticals for £3.75m in shares. In September, Conduit Pharmaceuticals completed its IPO on Nasdaq.

Antibody discovery and supply company Fusion Antibodies (LON: FAB) is collaborating with the US-based National Cancer Institute in the use of its OptiMAL technology for the discovery of antibodies for specific cancer targets. Fusion Antibodies will not have to commit significant resources to the collaboration. The share price jumped 83.8% to 5.875p, having been trading at a six-year low.

GCM Resources (LON: GCM) revealed that Power Construction Corporation of China has extended its memorandum of understanding period to 6 December 2024. This allows extra time to determine whether there will be a deal to develop the Phulbari coal mine in Bangladesh. The share price has recovered 72.2% from its all-time low to 1.55p.

Quadrise (LON: QED) is pleased with the progress made with the development of its MSAR and bioMSAR fuels and it is seeking to scale up with the help of commercial partners. Diesel engine testing has been completed at Aquafuel on blends of bioSMAR containing up to 40% of Vertoro’s crude sugar oil. This demonstrated improved fuel efficiency and lower NOx emissions. The share price is 62.7% higher at 2.2p, which is the highest it has been since June.

The second and third diamond drill holes at the Pitfield project owned by Empire Metals (LON: EEE) provided more positive news with the highest grades of titanium so far. The results suggest that the resource is much greater than previously thought. The focus becomes identifying high grades at shallower depth. The additional drilling will lead to mineral resource studies. The share price improved 52.9% to 10.7p. Empire Metals is the second-best share price performer on AIM this year.

FALLERS

RUA Life Sciences (LON: RUA) took advantage of last week’s share price surge to raise £4m at 11p/share. There is also a retail offer that closes on 7 December. That could raise up to £750,000. The share price dived 58% to 11.75p. That is lower than before its recent rise and is not far off its all-time low. The cash will finance the vascular graft and heart valve development programmes while partners are sought. Cavendish expects the company to be profitable in 2025-26 before any contributions from the developing products.

Healthcare services provider Totally (LON: TLY) is restructuring its business after a tough first half. Revenues were one-fifth lower at £55.8m due to lower urgent care business levels. Annualised cost savings of £3m have been made and there could be more to come. Share buying by directors has not stopped the decline in the share price which is down 51.4% to 4.5p. New chair Simon Stilwell bought one million shares at 6.1p each, while non-exec Michael Rogers acquired 40,000 shares at 5.333p each.

Tintra (LON: TNT) intends to cancel its AIM quotation. A general meeting will be held on 4 January to gain shareholder approval. Management bemoans that the share price is too low and believes that direct costs can be reduced by £505,000 – which is ridiculously high for a company of this size – by leaving AIM. It is strange that the management has let them get out of control. That is before any indirect costs. A Middle East investor may become a partner and one of the conditions of the deal is the AIM cancellation. There is talk of a potential Middle East listing. JP Jenkins will provide a matched bargain facility, although the minimum bid price is apparently going to be set at 150p/share for the first nine months so there is unlikely to be much trading. There may be a tender offer, but do not bet on it. The share price is not, and it has slumped 48.1% to 35p.

Siemens has sold its entire 11.2% stake in Sondrel (LON: SND) for £589,000. The placing price was 6p and the share price slumped 47.4% to 7.1p. The semiconductors designer raised £17.5m at 55p/share when it joined AIM in October 2022. Project delays have hit revenues and knocked the share price. Siemens has been a long-term partner and previously had a share purchase agreement with the company and the chief executive but that was terminated prior to flotation. Siemens was granted the status of preferred supplier of electronic design automation software for a 36-month period at the time of the flotation.

Tesla shares drop after new Cybertruck pricing reveal

Eve Katz
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0
Tesla shares drop after new Cybertruck pricing reveal

On Friday, Tesla’s CEO, Elon Musk, revealed that the long-awaited futuristic ‘Cybertruck’ is going to cost 50% more than his initial estimates.

New prices will start at $60,990, but many still worry about the car’s potential usefulness.

Tesla’s shares have been falling all week and are down 3% at the time of writing on Friday. That said, Tesla shares are up a bumper 117% year-to-date, paying testament to Musk’s pricing strategy across the Tesla fleet.

The truck was inspired by a car-turned-submarine from the 1977 James Bond movie “The Spy Who Loved Me,” said Musk.

Musk himself never hid his excitement about the car’s futuristic look and speed range.

The Cybertruck, he said, “can not only beat a Porsche 911 on the track, but it can also tow a 911 faster than the 911 can drive itself”.

When the design was first revealed by Tesla four years ago, many voiced their concerns about the car’s everyday usefulness and, therefore, its popularity on the market. Some refer to it as a comic-book car due to its futuristic design.

After that, responding to a major critique of the Cybertruck’s design—its practicality—Tesla presented a video demonstrating the truck’s superior towing capacity compared to a Ford F-350 diesel truck, as well as similar models from Chevrolet, Ram, and Rivian.

Following Musk’s 2019 projection of a $40,000 price for the Cybertruck, the vehicle garnered over a million reservations with $100 deposits.

Despite escalating raw material expenses for electric vehicles (EVs), Musk had not revised the price until Monday, announcing new deposits at $250. Analyst Paul Waatti from consultancy AutoPacific noted that the pricing was expected, anticipating the Cybertruck to resonate well with a more niche audience.

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