AIM movers: Warpaint London bids for Brand Architekts and ex-dividends

Andrew Hore
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AIM movers: Warpaint London bids for Brand Architekts and ex-dividends

Warpaint London (LON: W7L) is bidding 48p/share in cash for Brand Architekts (LON: BAR), valuing the company at £13.9m. There is a share alternative. Warpaint London believes that its relationships with retailers will help to boost sales of the health and beauty brands, such as Skinny Tan and Super Facialist, owned by Brand Architekts, which has high overheads compared with its revenues. The acquisition should be earnings enhancing in 2025. Brand Architekts shares jumped 91.7% to 46p. Warpaint London shares increased 3.05% to 540p.

Quadrise (LON: QED) released positive engine testing results on new prototypes of bioMSAR fuel, including a 100% biofuel. It showed an 85% reduction in carbon dioxide emissions compared to marine fuels and a significant reduction compared with diesel. This means that it could achieve a commercial, entirely fossil-free fuel before 2030. The share price rose a further 21.4% to 4.15p.

Sunrise Resources (LON: SRES) says that the CS pozzolan project in Nevada is mine-ready with an expected cement market customer base in California. There is currently funding discussion with four separate groups. The share price improved 15.4% to 0.0375p.

Pharma modelling company Physiomics (LON: PYC) has won a £157,000 with a long-standing client for assessing dosing and scheduling for a cancer treatment combination. The project will take less than 12 months. The share price is 11.5% higher at 0.725p.

FALLERS

Interim figures from telematics supplier Trakm8 (LON: TRAK) show reduced revenues from £8.54m to £8.31m, following a reduction in recurring revenues from £5.23m to £4.51m. The pre-tax profit slumped from £119,000 to £15,000. Net debt was £6.66m at the end of September 2024. Full year expectations have been reduced. The insurance market remains tough. There could be some improvement next year, but the outlook is uncertain. The share price slumped 21.7% to 4.5p.

Media analysis provider Ebiquity (LON: EBQ) has done better in the second half but not as well as it hoped. Some of the expected revenues will be delayed until next year. This will lead to a £2.6m shortfall in revenues that falls down to profit. Pre-tax profit will fall from £9.7m to £6.1m, compared with the £8.4m previously expected. Next year’s pre-tax profit forecast has been cut from £10.5m to £7.3m. The share price declined 17.8% to 18.5p.

Scancell Holdings (LON: SCLP) has taken advantage of the share price rise on the back of Geomab exercising its option to licence an anti-glycan monoclonal antibody from the company. The total deal is worth up to $630m and the upfront payment could be around $5m. Scancell was expected to have enough cash until the end of 2025, so the £10.3m fundraising at 10.5p/share will lengthen the time the cash will last. A retail offer could raise up to £1m. The share price slipped 17.6% to 11.125p.

Serica Energy (LON: SQZ) says that there has been another problem with the Trion FPSO in the North Sea, which has led to suspension of production. There is an issue with a compressor seal. Full repairs will not be completed until next year. Production for 2024 is forecast to be approximately 35,000-36,000 barrels of oil equivalent/day. The share price dipped 5.56% to 123.9p.

EMV Capital (LON: EMVC) raised £567,000 from its retail offer at 50p/share and an additional subscription means that a total of £1.5m was raised. The share price fell 2.88% to 50.5p.

Ex-dividends

Croma Security Solutions Group (LON: CSSG) is paying a final dividend of 2.3p/share and the share price fell 1.5p to 89p.

Mercia Asset Management (LON: MERC) is paying an interim dividend of 0.37p/share and the share price declined 0.4p to 30p.

Supreme (LON: SUP) is paying an interim dividend of 1.8p/share and the share price slipped 3.5p to 169p.

FTSE 100 flat as Frasers Group sinks

UK Investor Magazine
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FTSE 100 flat as Frasers Group sinks

The FTSE 100 struggled for direction on Thursday. A mix of corporate updates and political upheaval resulted in flat trading for the broader index as investors awaited US Non-Farm Payrolls data tomorrow.

“The French political crisis failed to knock European indices off course, with the CAC 40 up 0.6% and the FTSE 100 holding firm. That might be the calm before the storm if the pressure grows on president Emmanuel Macron to resign and there is a full breakdown of the current regime,” said Dan Coatsworth, investment analyst at AJ Bell.

“Financials led the way on the UK stock market with Admiral and Barclays at the top of the FTSE leaderboard. Admiral was given a boost by positive broker comment as Deutsche Bank moved its stock rating to ‘buy’ from ‘hold’.”

A 12% drop in Frasers Group shares weighed on the FTSE 100 on Thursday and offset positivity elsewhere in the market.

“Frasers’ revenue has taken a tumble in the first half, driven by weakness in retail sales. The higher price points within Premium lifestyle felt the worst with a 14% decline,” said Derren Nathan, head of equity research, Hargreaves Lansdown.

“UK Sports Retail was down 7.6% but this is a more diverse category than the title suggests. Some of the pull back here was due to a scale back in some of the group’s underperforming businesses such as video games retailer Game UK. But marketing initiatives and brand partnerships saw further sales growth at the flagship brand Sports Direct. 

“Pricing discipline and efficiency gains limited the decline in underlying pre-tax profit (PTP)to a low single digit number. However, that wasn’t enough to prevent a small decrease in guidance, with the group noting weaker consumer confidence both sides of the UK Budget.” 

The guidance reduction was the most damaging element of Frasers Group’s update. Given the recent spate of repeat downgrades by some retailers, there will be concerns that Frasers will lower guidance again. The festive period will be key.

Vodafone shares showed marginal signs of positivity after the CMA waved through the merger between Vodafone and Three as the companies pursue economies of scale.

“Vodafone and Three have secured regulatory approval for their merger, combining the UK’s third and fourth-largest mobile operators into a stronger competitor,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“While the full details are yet to emerge, this is a significant regulatory shift after years of blocked telecom deals. A streamlined three-player market, seen in countries like the Netherlands and Switzerland, could lift profitability and encourage much-needed investment in the UK’s lagging networks. This is a small win for the sector but doesn’t change the tough market dynamics.”

Share Tip: Costain Group – The latest contract win helps to show just how cheap are its shares at 104.50p, TP 135p, on just 7.3 times earnings! 

Mark Watson-Mitchell
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Share Tip: Costain Group – The latest contract win helps to show just how cheap are its shares at 104.50p, TP 135p, on just 7.3 times earnings! 

Less than four months ago just before the late August Interim Results announcement, I noted that the shares of Costain Group (LON:COST) the UK infrastructure engineering company, then at 89p, were far too cheap. 
Since then, the sector, in which it is a major player, has been rocked by the collapse of the ISG Construction group, with some 2,000 of its employees being made redundant as all of its projects were stopped. 
That was the biggest failure since Carillion went bust in 2018. 
Yesterday the group, whose shares are now 104.50p, announced a big new contract, demonstrating to...

What’s driving Gfinity shares?

UK Investor Magazine
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What’s driving Gfinity shares?

Gfinity shares are making a comeback after collapsing amid a slowing esports industry and a shift in the advertising landscape.

After losing 99% of their value from all-time highs to lows of 0.015p, Gfinity shares are making something of a comeback.

Gfinity’s problems were twofold: first, the company’s initial focus on esports couldn’t generate profit, and overall esports popularity was waning. Second, Gfinity’s media business suffered as Google algorithms changed and impacted the amount of traffic its portals received.

If they had maintained high traffic levels, the decision to move away from esports and focus on media might have proved successful, with the company able to deliver future profit growth with simple cost-cutting.

Nonetheless, Gfinity is reinventing itself again and capturing investors’ attention.

Investors will be delighted that the company announced it is on track to meet its target of monthly profitability by the end of 2024, but the really exciting part of the recent announcement is the company’s plans to diversify into video advertising.

The focus on gaming wore thin after the pandemic as gamers returned to the office and spent more time socialising with actual people instead of glued to their computer screens. The company highlighted changes in algorithms for falling user numbers, but in reality, a combination of factors dented revenue for the media business.

Gfiinity has now set its targets on the broad digital medium of video and freed itself from the shackles of struggling to carve out profits from gaming.

Gfinity’s plans are interesting because it is now targeting operations in a digital format with billions of users with a multitude of interests, which will allow Gfinity to focus on the underlying technology and not have to worry too much about consumer behavioural trends.

The company’s realignment towards video is driven by Gfinity’s largest shareholder, Robert Keith, and a related party transaction between Gfinity and 0M Technology Solutions Ltd, a company Robert Keith is the owner of.

Gfinity has signed a non-binding Memorandum of Understanding (MOU) with 0M Technology Solutions Ltd to commercialise its artificial intelligence technology for the connected video market.

Under the proposed terms, Gfinity will receive an exclusive license to use 0M’s Connected IQ (CIQ) technology, with 0M receiving a royalty fee of 30% of net profits generated from the license.

The deal would give Gfinity a new lease of life, and with shares priced for complete failure, investors are taking note.

Brand Architekts shares soar as Warpaint London swoops on competitor

UK Investor Magazine
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Brand Architekts shares soar as Warpaint London swoops on competitor

Warpaint London phas announced a recommended cash acquisition of Brand Architekts Group plc, valuing the company at £13.88 million.

Under the terms of the deal, Brand Architekts shareholders will receive 48p in cash, representing a substantial premium of 100% to the closing price of 24 pence on December 4, 2024.

As an alternative to the cash offer, eligible Brand Architekts shareholders can elect to receive 0.0916 new Warpaint shares for each Brand Architekts share. Based on Warpaint’s share price of 524p on December 4, this alternative share offer is equivalent in value to the cash offer of 48p per share.

Brand Architekts shares were 85% higher at the time of writing.

The acquisition has already secured significant support, with irrevocable undertakings to vote in favour of the deal received from shareholders representing approximately 31.35% of Brand Architekts’ existing issued ordinary share capital.

Warpaint’s strategic rationale for the acquisition centres on expanding its portfolio of health, beauty, and personal care brands while leveraging potential synergies.

The company believes Brand Architekts’ high-quality brands and established customer base will complement its existing operations. Notably, Warpaint sees an opportunity to improve profitability by reducing Brand Architekts’ relatively high overhead costs, which have been partly attributed to the expenses associated with maintaining a public listing as a smaller company.

A lowly Brand Architekt valuation will have played a part in the takeover. In the last financial year, Brand Architekt generated £17m revenue and has been trading with a market cap of around £7m.

The acquisition follows Warpaint’s successful track record of integrating complementary businesses, including its purchase of Retra Holdings Limited in 2017.

Between 2017 and 2023, revenue grew 55%, and profit before tax increased 123%. Warpaint expects this latest acquisition to enhance earnings further.

Investing for Children this Christmas 

Aberdeen Investment Trusts
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Investing for Children this Christmas 

Starting to save early can make a huge difference in your child’s future, providing them with the financial support they need for those big moments in life. 

  • Raising a child is an expensive business 
  • The first 18 years of a child’s life costs couples £166,000 
  • Starting to save early can make a huge difference 

“An investment account is for life, children, not just for Christmas, so that’s the way we’re going this year.” It’s not a line to endear you to your kids as they scribble their Christmas lists full of Beyblades, Furbies, Airpods and Asics trainers. 

But a personal nest egg accumulated during childhood could be a game-changer in the longer term, providing your youngsters with the funding they need to achieve key milestones of adulthood, from driving lessons and a car to a deposit on their first home. 

An expensive business 

Raising a child is already an expensive business, as every parent knows too well. Research from the Child Property Action Group in 2023 found that on average, the first 18 years of a child’s life cost couples £166,000 and lone parents a hefty £220,000. 

Unsurprisingly, many parents – particularly those with larger families – struggle to cover additional but important one-off outlays as their children fledge the family nest. 

Learning to drive and getting a first car, for example, is estimated by the RAC to cost around £7,700 on average. University is another challenge: Save the Student suggests that even if students at British unis take out a maintenance loan, they have to make up a shortfall of around £6,000 per year of study to cover accommodation and living costs. 

The average cost of getting a toe on the property ladder is even more daunting. According to Halifax data, first time buyers in the UK now have to put down an average £50,000 deposit. 

Starting to save early can generate additional growth over time 

These are large sums of money, but starting to save early can make a huge difference. Not only does it mean more time to add contributions, but it also allows the compounding process to work its magic, with reinvested returns generating additional growth over time. 

To give an idea of the power of compound growth, let’s say you invest £100 a month into an investment account returning an average 5% for your child from their birth. After nine years, the fund will be worth £13,661. But if you continue for another nine years until their 18th birthday, it will more than double to over £35,000. 

A slightly higher-risk fund potentially producing higher returns can make a considerable difference over the long term, too. In the example above, if you opt instead for a fund with total returns averaging 7%, the account could be worth more than £43,000 after 18 years. 

This underlines the fact that while it’s quite possible to set up a minimal-risk cash savings account for a child, over a timeframe of a decade plus it makes more sense to set up an investment account that gives exposure to the stock market, where inflation-beating returns are most likely to be achieved. 

The Barclays Equity Gilt Study for 2024 (which tracks average asset performance back to 1899) shows that over the past 10 and 20 years, UK equities have outperformed both gilts and cash in real terms, by more than 3% and more than 4% a year respectively. Over 124 years, equities have returned an average 4.8% a year, against less than 1% for both gilts and cash. 

Tax-efficient investing matters 

If you’re going to invest for your child it’s also important to consider the most tax-efficient way to do so, particularly over a long timeframe. 

A Junior ISA (JISA) is an excellent option, ensuring that the investment will grow free of income or capital gains tax, particularly helpful with the UK’s tax burden at record levels. 

Once it has been set up by a parent or guardian, anyone – grandparents, godparents or generous uncles, for instance – can pay into it, up to a total of £9,000 each year. Making regular contributions from your earned income is painless and a great savings discipline, but you can also make ad hoc payments. 

Either way, the account cannot be accessed by anyone until the child reaches 18, when it automatically transfers into their name. 

That’s likely to be fine if your youngster is level-headed and responsible, but parents of more wayward children might prefer an alternative route, albeit taxable. 

A designated account (opened in the parent’s name but with the child’s initials as an indicator) allows parents to decide when the money should be handed over. Parents need to be aware, however, that because the money effectively remains in their name, any income or gains generated will be taxed as theirs. 

Investment JISAs and designated accounts are widely available and easily opened through online platforms such as interactive investor. 

Once you’ve set up your child’s account, you’ll need to choose a fund or investment trust for the money coming into it. To keep things simple, it makes sense to select one or two ‘core’ broadbased equity investments covering a range of different markets. 

Investing for children with abrdn 

abrdn’s range of investment trusts is a good hunting ground. A strong core contender would be Murray International, a highly regarded global trust investing across multiple markets. 

UK choices include Dunedin Income Growth and Murray Income; or if you’re comfortable with a little more risk in return for potentially higher growth over the long term, you could tap into abrdn’s longstanding Asian expertise, for example through abrdn Asian Income Fund. 

In each case, the dividend income generated can be reinvested into additional shares, helping to boost long-term growth through compounding. 

An investment account may not have the playground or pulling power of the latest must-have accessories this Christmas morning – but treat it right and it could produce a nest egg to take your kid’s breath away in years to come. 

Find out more at abrdn.com/children. 

Important information 

Risk factors you should consider prior to investing: 

  • The value of investments and the income from them can fall and investors may get back less than the amount invested. 
  • Past performance is not a guide to future results. 

Other important information

Issued by abrdn Fund Managers Limited, registered in England and Wales (740118) at 280 Bishopsgate, London EC2M 4AG, authorised and regulated by the Financial Conduct Authority in the UK. 

Find out more at www.abrdn.com/Trusts or by registering for updates. You can also follow us on X, Facebook and LinkedIn. 

FTSE 100 slips with political risks in focus, Legal & General jumps

UK Investor Magazine
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FTSE 100 slips with political risks in focus, Legal & General jumps

The FTSE 100 retreated on Wednesday as political events and softness in mega-cap pharma stocks weighed on the index.

Equity bulls will be disappointed that yesterday’s FTSE 100 rally failed to surpass 8,400 on its fifth attempt since May. A 0.2% drop for London’s leading index on Wednesday looks to have put all-time highs at 8,445 out of immediate reach without any major catalysts before the US Non-Farm Payrolls on Friday.

“Political risk has been put back on the agenda after South Korea was plunged into chaos by the declaration, then subsequent lifting of martial law. Deep uncertainty looms for France too. The looming vote of no-confidence in the minority government of Michel Barnier threatens fresh political upheaval in a key EU member state,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

The next macro catalyst is due on Friday. The release of November’s Non-Farm Payroll report will provide traders insight into how the US economy has reacted to devasting weather events and Donald Trump’s election victory.

Although mining shares dragged on the index on Wednesday, yesterday’s rally in oil majors BP and Shell shares continued on Wednesday on as oil prices traded sideways after a brief rally. The pace of the gains for BP and Shell slowed due to the realisation that oil prices were likely to remain under pressure for the foreseeable future.

“Data and news flow were both rather lacking yesterday, with the most notable headlines being those which largely confirmed what was already known, namely, that OPEC+ is set to delay the planned 180k bpd output hike for the entirety of Q1,” said Michael Brown Senior Research Strategist at Pepperstone.

“While this was enough for a knee-jerk move higher in both Brent and WTI, in the grand scheme of things it is ‘small beer’, considering the dismal demand outlook, and proposals for the US to increase crude production by as much as 3mln bpd. I remain a rally seller in crude, though of course wouldn’t seek to hold positions over the weekend as geopolitical risk continues to linger.”

BP gained 0.5%, while Shell added 0.6%.

Centrica shares rose 0.4% on the news four nuclear plants it has a stake in will remain open longer than previously thought.

“The decision to extend the life of four ageing nuclear power plants was something British Gas owner Centrica had little control over, but it still energised the company’s share price,” explained AJ Bell investment analyst Dan Coatsworth. 

“Centrica has a meaningful stake in the four EDF-partnered nuclear power plants. The extension comes as the UK looks to avoid the risk of blackouts amid the transition away from fossil fuels to renewable energy sources.”

Legal & General was the FTSE 100’s top riser after hosting a ‘deep dive’ into its retirement business and confirmed it is on track to meet group guidance set out in June. Legal & General was 4% higher at the time of writing.

AIM movers: Chariot investee company funding and more delays for Biome Technologies

Andrew Hore
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AIM movers: Chariot investee company funding and more delays for Biome Technologies

Yesterday, Blue Star Capital (LON: BLU) said it did not know why the share price was rising. That led to a decline, but it has risen a further 28.6% to 0.0225p today.

Chariot (LON: CHAR) owns 49% of South African electricity trading platform Etana Energy has secured a $100m guarantee finance facility. This could finance $500m of new renewable projects with a generating capacity of 500MW in total. This is the first step in securing financing to develop the business and it provides validation of the business, which could become a highly valuable investment for Chariot. The share price moved up 7.71% to 1.955p.

N4 Pharma (LON: N4P) has filed a patent for its oral anti-inflammatory irritable bowel disease product in early pre-clinical development. It uses the Nuvec delivery system. The share price jumped 17.4% to 0.675p.

Fund manager Premier Miton (LON: PMI) increased assets under management by 9% to £10.7bn in the year to September 2024 and the figure rose to £10.9bn by the end of November 2024. Pre-tax profit fell from £5.9m to £3.2m and the total dividend was maintained at 6p/share.  The share price is 10% higher at 60.5p.

Geomab has exercised its option to licence an anti-glycan monoclonal antibody from Scancell Holdings (LON: SCLP). Anti-glycan antibodies with high affinity are difficult to produce. The total deal is worth up to $630m and the upfront payment could be around $5m. Scancell will have enough cash until the end of 2025. The share price increased 5.77% to 13.75p.

FALLERS

Biome Technologies (LON: BIOM) says additional problems with large projects relating to bought in parts and assemblies mean they will not be delivered this year. This means 2024 results will be well below the previously downgraded figure. Additional working capital is required and a debt facility is being discussed. John Standen has stepped down from the board. The share price slumped 28.6% to 3.75p.

Clinical diagnostics company Oxford BioDynamics (LON: OBD) says it continues to try to secure funding. There is no guarantee that it will be successful. Cash will be required early in 2025. The share price dived 26.7% to 1.6125p.

New Technology Capital Group has reduced its stake in data processing semiconductor technology developer Ethernity Networks (LON: ENET) to below 3%. This announcement comes when Ethernity Networks is raising £130,000 at 0.133p. This provides working capital. The share price fell 11.4% to 0.14p.

Thor Energy (LON: THR) has appointed Dekel Agri-Vision (LON: DKL) boss Lincoln Moore as a non-executive director. Rowan Harland takes over as company secretary.The office in Adelaide is being closed. The share price declined 10.3% to 0.65p.

Three reasons to consider NextEnergy Solar Fund shares after the recent dip

UK Investor Magazine
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Three reasons to consider NextEnergy Solar Fund shares after the recent dip

The NextEnergy Solar Fund’s share price has softened slightly since the Investment Trusts announced net asset value fell marginally due to energy price forecasts.

The trust regularly updates the valuation of its portfolio of solar assets to reflect the discount rates and expected future cash generation.

Looking past the short-term gyrations in underlying energy markets, we explore three factors central to the NextEnergy Solar Fund investment case.

NextEnergy Solar Fund yields 12%

The NextEnergy Solar Fund is a dividend juggernaut. The trust has consistently increased its dividend and is on track for another year of growth. The full-year dividend is expected to increase to 8.43p for the year ending 31 March.

Highlighting the sheer scale of the dividends distributed by the NextEnergy Solar Fund, the trust has paid out £370m in dividends totalling 72p since its IPO. This compares to a current share price of 69p and a market cap of £400m.

Dividend yields above 10% are treated with scepticism. However, the NextEnergy Solar Fund has set a dividend cover target of 1.1x -1.3x for the full-year dividend, meaning the dividend paid is more than covered by income, reducing the risk of any reduction in the dividend payout.

The income that covers the dividend is remarkably reliable. A common misconception is that solar power heavily depends on the weather and how bright the sun shines. Of course, the weather has a degree of variability, but its impact on a solar facility’s ability to generate power is minimal. NextEnergy Solar Fund uses Power Purchase Agreements to lock in prices for the power it generates and provide income security.

Share buybacks

The NextEnergy Solar Fund’s commitment to share buybacks further underpins its attraction. The trust has a programme of up to £20m, of which £6.2m was utilised up to 20 November 2024.

The share buyback programme isn’t massive, but the fact that one is in place demonstrates the underlying health of the trust’s finances, adding an extra layer of reassurance to its ability to pay dividends.

Share buybacks are currently playing a major part in shareholder returns for UK equity investments, and investors should be encouraged to see NextEnergy committed to a programme.

Asset sales at a premium to book value

NextEnergy Solar Fund shares trade at 29% discount to NAV. Wide discounts are a common theme across renewable infrastructure Investment Trusts. However, recent asset sales as part of NextEnergy’s capital recycling programme reinforce why their discount is unjustified.

Discounts across the sector partly reflect the higher interest environment and partly reflect concerns about a potential disparity between the achievable valuation of assets and the reported valuation.

Concerns about the achievable valuation of NextEnergy Solar Fund’s assets may be misplaced. As part of its capital recycling programme designed to manage its exposure to higher interest rates, NextEnergy has disposed of a limited number of assets at a premium to their holding value, delivering a 2.76p uplift in the trust’s NAV.

This highlights two things: first, NextEnergy Solar Fund NAV calculations have proven conservative compared to the price acquirers are prepared to pay, and second, any discount to NAV due to the trust’s portfolio’s achievable NAV could be unwarranted.

In addition to the benefits outlined above, investors must consider the risks, as with all investment trusts. NextEnergy Solar Fund is exposed to power prices that can be unpredictable, and there is an element of exposure to inflation through subsidies.

Share Tip: Greencore Group – Wonderful performance over the last year – shares have doubled in eight months, with more to come 

Mark Watson-Mitchell
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Share Tip: Greencore Group – Wonderful performance over the last year – shares have doubled in eight months, with more to come 

As I said last week when AO World issued its latest Interim results – I really do like to see companies upgrading their market guidance. 
It is especially noteworthy in the current economic environment which is generally voicing sluggish performances. 
So yesterday’s results from my favourite food group – Greencore Group (LON:GNC) – pleased me no end. 
The 52 weeks to 27th September 
Yesterday’s finals were stronger than expected and portrayed a very positive outlook for the current year to end-September 2025. 
Despite group revenues being down 5.6% at £1,807.1m (£1,91...

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