AIM movers: NICE recommends genedrive test and Shearwater contract delays

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NICE has recommended the genedrive (LON: GDR) CYP2C19-ID test for genotype-guided clopidogrel treatment in the NHS. It is the preferred platform for UK point-of-care testing for the management of ischemic stroke and transient ischaemic attack patients. It is advised that these patients should have a genetic test before antiplatelet treatment. The share price jumped 53.3% to 5.75p.

Guernsey-based APQ Global Ltd (LON: APQ) has published a trading statement reaffirming the end-February NAV of 23.97p/share. This was mainly due to the strong trading performance of US-based corporate advisory business Delphos International, where the valuation increased from $6.3m to $27m. The share price rose a further 18.2% to 6.5p.

Cambridge Nutritional Sciences (LON: CNS) is attending four major industry events in the current quarter. This is part of a campaign to increase awareness of the company’s personalised health and nutrition products. The share price improved 11.1% to 10p.

Oxford BioDynamics (LON: OBD) has opened a clinical testing facility in the UK for the EpiSwitch prostate screening blood test. This will shorten the turnaround time for tests. The share price increased 4.62% to 9.74p.

FALLERS

Cybersecurity consultancy and services provider Shearwater Group (LON: SWG) admits that it will make a loss in the year to March 2024. Revenues fell from £26.7m to £22.6m. Previously £32.5m was expected. There have been delays in contracts. The forecast 2024-24 revenues have been cut from £36.7m to £27.6m and the pre-tax profit estimate reduced from £1.7m to £600,000. The share price slumped 12.1% to 43.5p.

Canaccord Genuity has published its downgraded forecasts for plant-based polymers developer Itaconix (LON: ITX). It expects 2024 revenues $6.2m, compared with $9.5m previously and $7.8m for 2023. The forecast loss has been increased to $1.83m. The company will not move into profit in 2025 as previously expected. There should still be net cash of £3.8m at the end of 2025. Itaconix has not been able to agree terms with one of its main merchandising customers in North America. The share price fell further 8.72% to 178p.

Broker Peel Hunt (LON: PEEL) says full year revenues will improve from £82.3m to £85.5m, thanks to higher M&A income, but it will make a loss. RetailBook has raised outside finance and will be operated independently of Peel Hunt. The full year results will be published on 13 June. Market trading volumes are still low, and this is set to continue. Management says that the sentiment towards new admissions is improving. The share price slipped 5.14% to 120p.

Thor Explorations (LON: THX) has acquired interests in two exploration licences near to its Douta gold project in Senegal. It is paying $120,000 for up to 85% of the Douta West licence and $20,000 plus a $300,000 exploration spending commitment for up to 80% of the Sofita licence. This year’s production guidance for the Segilola mine is 95,000-100,000 ounces of gold. The share price declined 3.45% to 14p.

Investing in a Stocks & Shares ISA early in the tax year produces better returns – Hargreaves Lansdown analysis

Analysis by broker Hargreaves Lansdown found that those who invest earlier in the tax year produce better returns than those who wait until the end.

“ISA early birds get the returns,” said Sarah Coles, head of personal finance, Hargreaves Lansdown.

With the end of the tax year fast approaching, many will be making preparations to use their ISA allowance before they lose it. However, it is those who choose to invest in the early days of the tax year rather than the last days that earn the best returns, according to Hargreaves Lansdown. 

“The earlier you use your ISA allowance in the tax year, the better, because your investments have longer to grow, and are protected from tax straight away. Over the past ten years, investing on the first day of the tax year could have left you £38,000 better off,” Coles said.

HL’s analysis found that if an investor invested their full ISA allowance in the Legal & General International Index fund on the first day of the tax year every year for the past decade, they would have seen their investments grow to £360,500. This would compare to £322,500 if they had done it on the last day of the tax year.

Sarah Coles explained the benefits of having your money invested from the beginning of the tax year, and also the potential constraints of doing so:

“Early bird ISA investors who have a lump sum to invest at the outset gain up to a whole year of dividends and potential growth in the stock market ahead of those who leave it until the last minute. And because their investments are protected from tax, they don’t risk having to hand over any of these extra gains to the taxman,”

“The early birds aren’t sitting pretty every tax year, and at times of market falls, those who got in towards the end of the tax year will have dodged the drops earlier on. However, the fact the early birds do so much better over time shows how these years are soon forgotten among average stock market performance.”

Tesla shares sink as sales wobble – a buying opportunity for investors?

Tesla shares fell in overnight trade after the electric vehicle manufacturer released disappointing sales figures.

The EV maker’s shares closed down 4.9% at $166 after announcing a 20% drop in sales as the continues to struggle with falling demand for its vehicles.

While a number of factors influence sales at Elon Musk’s Magnificent 7 tech company, investors are appearing to grow tired of faltering sales as the share price continues to decline.

“Ongoing disruption in the Red Sea is just one of the production issues plaguing Tesla, which have contributed to a 20% drop in sales quarter on quarter, with deliveries of just under 387,000 vehicles coming in significantly below market expectations,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“Tesla may have pulled off the tricky manoeuvre of stealing back the crown as the biggest seller of electric vehicles from Chinese rival BYD, but it’s not been enough to arrest a sharp fall in the share price as investors expressed disappointment with the deliveries number.”

Despite earning a place as a ‘Magnificent 7‘ tech stock, Tesla’s stock performance has not lived up to the title.

Tesla shares are down 14% over the past year, by far the worst of the ‘Magnificent 7‘ that includes, Microsoft, Apple, Meta, Alphabet, Nvidia and Amazon. For context, Meta is up 133% over that period.

Tesla’s efforts to push into AI are compounding problems for the car maker, as spending on AI erodes margins already under pressure from falling sales.

“The fabled Magnificent Seven group of tech giants is now splintering off as a playground style popularity contest evolves, based largely on firms’ artificial intelligence credentials,” Streeter explains.

“As the famous five of Nvidia, Meta, Microsoft, Amazon and Alphabet head off on an AI adventure, Tesla and Apple still appear to be searching for the right clues to take advantage of this new world of opportunity.”

Although yesterday’s sales number and Tesla’s general financial performance don’t make for pretty reading, Elon Musk has consistently produced innovations that gain commercial traction. We will learn more about Tesla’s AI endeavours in due course, and loyal long-term investors will hope for another Musk triumph.

Those who liked Tesla at $200 will love it at $166 after yesterday’s drop. 

Siemens says it has no intention to bid for Renishaw

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Scientific instruments manufacturer Renishaw (LON: RSW) was boosted by press speculation that Siemens might bid for the company and the share price rose 100p to £43.50. However, after the market closed Siemens announced that it did not intend to table a bid for Renishaw.

The two founders and main shareholders are both more than 80 years old. Sir David McMurty owns 36.3% and Daniel Deer holds 16.6%.

The two men put their shares up for sale in 2021 and that set off a formal sale process. They were keen that a buyer would not change the way the company is run and the spending on research and development. Siemens was mentioned as a possible buyer that that time.

A suitable buyer was not found, and the two men, who met when they worked at Rolls-Royce, said that they had no intention of selling shares following the ending of the sale process. They did recognise that they would need to think about what to do with their shareholdings over the medium-term.

The share price is around two-thirds of the level it was at the time of the formal sale process. Renishaw is valued at £3.17bn and it is a constituent of the FTSE 250 index. It is forecasts to make a pre-tax profit of £133.2m on revenues of £682m, with an increase in pre-tax profit to £157.7m next year.  

Superdry shares sink as rescue talks fail

Superdry shares were sharply lower on Tuesday after talks with the group’s CEO about making an offer for the remaining shares he does not already own failed to produce a deal, leaving the company in a precarious position.

Superdry released a statement late on Thursday last week announcing Superdry founder Julian Dunkerton had not made a formal offer for the company. The announcement also alluded to a possible capital raise at a significant discount to current market prices.

“The Company remains in discussions with Julian Dunkerton in respect of alternative structures, including a possible equity raise fully underwritten by Julian Dunkerton, which would provide additional liquidity headroom for the Company’s turnaround plan. It is expected that any equity raise would be at a very material discount to the current share price,” Superdry said in a statement.

The threat of a possible fundraise has sent investors running for the hills and Superdry shares were down around 50% at the time of writing.

“Investors finally had a chance to price in a barrage of bad news from Superdry which was released after the market close last Thursday. The share price slumped by 47% which implies disaster,” said Russ Mould, investment director at AJ Bell.

“Julian Dunkerton has withdrawn his attempt to take the troubled retailer private which means Superdry now faces the prospect of having to conduct a heavily discounted fundraising to stay alive, conditional on delisting the group from the stock market.

“It has secured additional borrowing facilities that come with a chunky interest rate but that’s only going to be a small plaster on a big wound – not enough to save the day.

“Investors now appear to be dumping the stock to get back anything they can, even if it means crystalising a loss. In the absence of someone else throwing their hat in the ring and trying to buy the business, we can probably wave goodbye to Superdry as a listed entity.”

AIM movers: 88 Energy flow test and Redx Pharma leaving AIM

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88 Energy (LON: 88E) says the flow test of the Hickory-1 well in Alaska showed peak flow of 70 barrels of oil/day. This is a step towards showing that the well is commercial. Results from tests of the SMD-B reservoir are expected by mid-April. The joint venture partner Burgundy Xploration has paid its $1.75m contribution leaving 88 Energy well-funded for its immediate requirements. The share price jumped 40.1% to 0.365p.

ImmuPharma (LON: IMM) has commenced a new IP strategy for the P140 technology platform for autoimmune diseases. The patent portfolio is being expanded. This will support patient studies and help discussions with potential commercial partners on existing indications for systemic lupus erythematosus, which is starting a phase 3 trial, and chronic idiopathic demyelinating poly neuropathy. The share price is 25.9% higher at 2.675p.

Horizonte Minerals (LON: HZM) says senior lenders have agreed to further waivers on interest payments until the end of April. If it is not extended further deferred interest payments for the past two quarters will become immediately due. The company’s Brazilian subsidiary is in a 60-day stay period against the enforcement of debt and security held by lenders and creditors and Horizonte Minerals is a guarantor of the debt. Any claim could force Horizonte Minerals into administration. The share price recovered by one-third to 2p.

Video games publisher Frontier Developments (LON: FDEV) is trading in line with expectations before the benefit of the profit from the sale of RollerCoaster Tycoon 3 publishing rights. Those rights returned to Frontier Developments in 2018 under the original publishing agreement. The game has been generating $1.5m profit/year. Atari has acquired the rights for $7m with an initial payment of $3m. There was no value in the books for the game. This has boosted the cash position to £23.4m. The share price rose 15.3% to 162.5p.

FALLERS

Redx Pharma (LON: REDX) is the latest AIM company that has decided to leave. A plan to reverse into a Nasdaq shell fell through and there is limited liquidity for the shares. There are already enough votes to guarantee that the proposal is passed at the general meeting on 19 April. The share price dived 59.5% to 7.5p. Last October, £14.1m was raised at 26p/share. Management believes that it will be easier to raise money as a private company.

Perpetual has reduced its stake in semiconductors designer Sondrel (LON: SND) from 3.95% to less than 2.3%. The share price slumped 47.5% to 3.15p. Siemens sold its stake at 6p/share at the end of 2023.

Portable oxygen technology developer Belluscura (LON: BELL) has suffered from the distraction and delays in the acquisition of standard list shell TMT Acquisition. This delayed the launch of the DISCOV-R product until June and the acquisition of components. Manufacturing is being moved to InnoMax in China. Cash flow breakeven has been delayed until the first quarter of 2025. A line of credit is being sought to cover non-recurring expenses. There is $3m in cash at the end of March 2024. The 2024 revenues will be lower than the previous range of $16m-$19m. There will be impairment charges in the 2023 accounts. The share price is 46% lower at 10p.

Plant-based polymers developer Itaconix (LON: ITX) has not been able to agree terms with one of its main merchandising customers in North America. Management has been trying to improve gross margins and this is lower margin business. This means that 2024 revenues will be in the range of $6m to $6.5m, compared with $9.5m previously and $7.9m for 2023. Gross margins will be better, but the loss will be higher than the $1.12m previously forecast. The share price fell 23.7% to 200p, but it is still 68% higher than at the beginning of the year.

FTSE 100 attacks all-time record highs as oil gains

The FTSE 100 again flirted with all-time highs on Tuesday as Middle East tensions sparked a rally in oil, taking London’s oil majors with it.

London’s leading index traded above 8,000 in early trade before falling back to print 7,972 at the time of writing.

“The ongoing rise in oil prices amid a tighter supply outlook is a worry for corporates and consumers as it is a major inflationary force,” said Russ Mould, investment director at AJ Bell.

“A 0.8% advance to $88.08 per barrel puts the commodity price at its highest level since October 2023 and explains why Shell and BP were among the biggest drivers for the FTSE 100 today. Commodity producers account for a large weighting of the FTSE 100 and the index typically does well when these stocks are bid up.”

BP gained 2.8% and Shell jumped 3.2%. Stronger gold prices helped Fresnillo 6% to the top of the FTSE 100 leaderboard. Miners Glencore, Rio Tinto and Anglo American had a good start to week after a strong showing from Asian indices over the long weekend.

In the absence of any major catalysts today, lighter trade in and around the Easter holidays may be what the FTSE 100 needs to break through to record highs. Later this week, the US jobs report will be in focus for any indications of when the Federal Reserve may move to cut interest rates.

“The Federal Reserve will be watching the commodity market like a hawk as part of its decision-making on interest rates. It has a dual mandate of controlling inflation and getting the US as close to full employment as it can. Markets currently believe it can pull off the treble of cooling inflation, managing a soft landing for the US economy and cutting rates,” Russ Mould said.

“If higher oil prices threaten to rock the boat, investors will certainly not want any drama from job figures this week.

“The number of job openings in the US slipped in January and the same is expected again when February’s figures are reported this afternoon. Friday will see further jobs data, covering non-farm payrolls, unemployment and wage growth. Markets will be looking for a figure that is neither too hot as an overheated market might postpone rate cuts, or too cold as disappointing data would increase speculation of a hard economic landing.”

Should this week’s job data strengthen the view that major central banks will cut rates in the near term, one would expect the global equity market rally to continue.

The UK has lagged behind major US, German and Japanese indices in terms of breaking to fresh record highs – but it may soon hit the headlines if the all-time record closing high of 8,014 is breached.

The FTSE 100’s record intraday price is 8,047.

Oil prices rise on Middle East tensions

Oil prices rose on Tuesday after Israel launched an air strike on an Iranian embassy in Syria over the weekend. 

The strike has raised fears of retaliation by Iran and an escalation in the Middle Eastern conflict that could disrupt oil supply.

Brent oil futures were trading 1.48% higher at $88.71 and WTI rose 1.58% to $85.03.

Iran’s leaders have promised a reaction after a senior Islamic Revolutionary Guard Corp general was among those killed in the attack.

Although Iran has yet to respond, it is widely thought Iran’s military proxies could step up activities across the region.

Oil prices have been subdued since the earlier month of the war on Gaza but have ever so steadily increased in recent weeks in hopes of stronger economic demand and increasing geopolitical tensions.

“An Israeli airstrike on Iran’s embassy in Syria, which has killed Iran’s top commander, has reignited geopolitical tensions, and squeezed the oil price higher in return,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.

“Brent crude is now trading at over $88 a barrel, as concerns over supply spill over into the price. At the same time, there’s little expectation that OPEC’s production policies will loosen, adding further pressure.”

UK property prices fall for the first time in three months – Nationwide

The average UK property price fell 0.2% in March from February, according to new data released by Nationwide.

The average UK home is now worth £261,142 – 1.6% higher than in March 2023.

Falling mortgage rates had helped spur a bottoming out of UK house prices in late 2023 but the impact is diminishing in a ‘subdued’ market. 

“UK house prices fell by 0.2% in March, after taking account of seasonal effects. Nevertheless, the annual rate of house price growth edged higher to 1.6% in March, from 1.2% in February,” said Robert Gardner, Nationwide’s Chief Economist.

“Activity has picked up from the weak levels prevailing towards the end of 2023 but remains relatively subdued by historic standards. For example, the number of mortgages approved for house purchase in January was around 15% below pre-pandemic levels. This largely reflects the impact of higher interest rates on affordability. While mortgage rates are below the peaks seen in mid-2023, they remain well above the lows prevailing in the wake of the pandemic (as shown in the chart below).

That said, long-awaited Bank of England interest rate cuts are expected to provide house prices with a welcome boost. The degree to which the BoE cuts rates and stimulates buyers will hold the key to house price performance during the rest of 2024.

While the news house prices fell in March will be disappointing, experts are confident the decline could prove to be a blip in a recovering market.

“Sellers have every reason to start feeling positive about putting their home up for sale and being able to go on to buy their next perfect property. 2024 has shown a positive trend that house prices are growing once again following three years of economic turbulence,” said Nathan Emerson, CEO of Propertymark.

Ultimate Products – surely 80% of the UK households cannot be wrong

Apart from being major retail names, tell me what do the following companies have in common?

Tesco, Asda, Aldi, Sainsburys, Morrisons, B&M, Co-op, B&Q, The Range, Express Gifts, Action SystemeU, Iceland, Boots, Dunnes, The Works, Continente Modelo, Primark, Robert Dyas, Factory Shop, Amazon, Avon, The Range, Homestore and More, JTF, Argos, House of Fraser, The Works, Dunelm, Superdrug, Poundland, AS Watson, Blokker, Gifi, Debenhams, Poundworld, Matalan, JD Williams, Ryman, Shop Direct, Costco, Groupon and Catch of the Day.

Yes, it really is quite a list of retail store groups – ...