Download the presentation slides.
Temple Bar is a well-established investment company, taking a value approach combined with deep fundamental analysis to offer something distinct to investors. The Trust is managed by Nick Purves and Ian lance of Redwheel , who have more than fifty years of investment experience between them and have been working as a partnership for over fifteen years.
The FTSE 100 traded sideways for most of Friday’s session after a sell-off of US equities overnight on revisions to interest rate cut expectations spilt over into the European session.
Federal Reserve Chair Jerome Powell’s comments overnight sent US equities into a tailspin. Powell signalled that the Fed was in ‘no hurry’ to cut rates amid robust economic conditions.
While the assessment of the US economy is excellent for ‘Main Street’, Wall Street did not welcome the potential consequences for monetary policy. Major US indices faced their biggest bout of selling since the US election, and the weakness was evident in US futures again on Friday.
This naturally sapped the enthusiasm out of European equities in early trade, and poor UK GDP gave investors very little to cheer about. Another eyebrow-raising appointment by Donald Trump also weighed on the FTSE 100’s pharma heavyweights, offsetting strength in mining companies and banks.
“Pharmaceutical stocks left the FTSE 100 looking sickly on Friday morning as AstraZeneca and GSK shares came under pressure,” says AJ Bell investment director Russ Mould.
“The announcement of vaccine-sceptic Robert F. Kennedy Junior as health secretary pick for the incoming Trump administration has spooked investors in the sector, with US drug companies also seeing their shares come under significant pressure overnight. The impact on the sector is hard to judge fully at this stage but, at the very least, it will cause a good deal of uncertainty.
“The latest UK GDP figures offered evidence of the chilling effect of a Budget build-up filled with warnings about hard decisions. The government’s gloomy messaging proved to be a self-fulfilling prophecy as growth slowed significantly.”
Upbeat Chinese retail sales were the key driver of gainers for mining shares Anglo American, Glencore, and Rio Tinto which all helped provide support for the FTSE 100 and balance out selling elsewhere.
Land Securities was the top FTSE 100 riser after the Real Estate Investment Trust issued an encouraging assessment of trading conditions and highlighted an uptick in rental values.
“Our operational outperformance continues, with further growth in occupancy and positive rental uplifts across our retail and London portfolio, which is translating into accelerated income growth,” said Mark Allan, Chief Executive of Landsec.
“Combined with our focus on cost efficiencies, we therefore raise our outlook for EPRA EPS and now expect FY25 to be in line with last year’s level despite £0.5bn of net disposals over the past year, and for this outperformance to flow through into FY26.
“At the same time, property values have stabilised, with growth in rental values driving a modest increase in capital values, resulting in a positive total return on equity. We expect these trends to persist, as customer demand for our best-in-class space remains robust and investment market activity has started to pick up.”
Cancer diagnostics developer Angle (LON: AGL) technology is being showcased at an American Association for Cancer Research special conference. Angle is presenting a talk on PD-L1 status in circulating tumour cells isolated by its Parsortix diagnostics technology from blood samples of lung cancer patients. Data produced has high analytical sensitivity and specificity and suggests that this technology can be used for personalised treatment of lung cancer patients. Additionally, there is a report on progress of developing a system to classify HER2 protein expression for breast cancer. This is being developed with BioView. The share price recovered 15% to 11.5p.
GreenRoc Strategic Minerals (LON: GROC) says the Greenland authorities has confirmed that its application for an exploitation licence for the Amitsoq graphite project fulfils requirements. A recommendation will be mad to the government on whether to approve the project for public pre-consultation, which takes a minimum of 35 days. Management has been invited to visit General Motors as part of a group of potential suppliers. The share price improved 14.8% to 1.55p.
Rosslyn Data Technologies (LON: RDT) has been awarded a contract by a leading global consulting firm. A centre of excellence will be set up so that the consulting group can offer the data analytics technology as its preferred solution. The first customer has been secured and that is worth £500,000 over three years. The share price rose 9.04% to 5.125p.
Programmatic advertising services provider Nexxen International (LON: NEXN) plans ask shareholder permission at its AGM for a departure from AIM and change its Nasdaq listing from ADRs to ordinary shares. Third quarter figures show 12% growth in revenues, while EBITDA is 49% ahead at $31.6m. The 2024 EBITDA forecast has been raised by 7% to $107m, which is still well below the 2022 level. The share price is 7.36% ahead at 313.5p.
Steppe Cement (LON: STCM) plans to reduce the share capital in the balance sheet so that it can pay a 1.5p/share dividend, equivalent to $4.2m. The share price increased 7.14% to 0.075p.
FALLERS
Delays to defence orders have hit Solid State (LON: SOLI) and profit will be much lower than expected this year. Cavendish has downgraded 2024-25 earnings by 58% to 5.5p/share and next year’s by 48% to 7.9p/share because it is uncertain when the order will come through. The UK government has paused spending on a major defence order ahead of a strategic defence review next summer. The dividend could be maintained at 4.3p/share. The share price dived 32.9% to 142.5p.
Tekcapital (LON: TEK) has raised £1m at 7.5p/share. The technology company developer will invest £400,000 in Guident’s remote monitor and control centre and a further £200,000 for a planned flotation in 2025. The share price dipped 21.5% to 7.85p.
Altitude Group (LON: ALT) has published an interim trading statement saying that trading is in line with expectations. A new contract has been won by its University Gear Shops business, taking its annualised average revenues to $9.5m. Zeus has maintained its full year pre-tax profit forecast at £1.9m. Even so, the share price fell 16.2% to 28.5p.
Electrical accessories Volex (LON: VLX) has approached TT Electronics (LON: TTG) about a cash and shares bid. It has made two offers. The second offer was 62.9p/share and 0.233 of a Volex share, implies an offer of 139.6p/share at yester day’s closing share price. TT Electronics does not want to enter discussions and has rejected the approach. Volex is critical of recent acquisition by TT Electronics. Volex reported interim revenues 30% higher at $518.2m – organic growth was 10% – and underlying pre-tax profit 12% ahead at $37.5m. The interim dividend is 7% higher at 1.5p/share. The strongest organic growth was in the electric vehicles division, although all divisions grew. The share price slipped 14% to 295.5p.
TT Electronics shares were sharply higher in early Friday trade on news that Lonon-listed competitor Volex had made several takeover approaches.
Volex, a specialist in data connectivity solutions, has made two separate takeover proposals to TT Electronics. According to a statement released by Volex on Friday, TT Electronics’ board rejected both offers and declined to engage in discussions.
Nevertheless, the takeover talk sent TT Electronics shares soaring higher by 38% to 109p.
The initial proposal, valued at 129p per share, consisted of 62.9 pence in cash and 0.203 new Volex shares for each TT Electronics share. This was followed by a second, enhanced proposal offering, valued at 135.5 pence per share at the time of the offer.
Based on Volex’s share price at the close of business on 14 November 2024, the latest proposal now values each TT Electronics share at 139.6 pence, translating to a TT Electronics valuation of £248.6 million.
This represents a premium of 76.7 per cent above TT Electronics’ closing price of 79.0 pence on 14 November 2024, and a 73.2 per cent premium over the one-month volume-weighted average share price.
“We believe that bringing Volex and TT Electronics together in a highly synergistic transaction would create a scaled and diversified leader in the specialist electronics market which would act as a platform for future organic and inorganic growth and significant value creation,” said Lord Rothschild, Executive Chairman of Volex.
“TT Electronics would provide the Group with further exposure to structural growth markets, such as medical and industrial technology, and add a new end-market, aerospace and defence, to progress Volex’s successful strategy of diversification. At the same time, TT Electronics would benefit from being part of a larger group with stronger performance and the associated opportunities for revenue and cost synergies to deliver higher profitability.”
Should the second proposal proceed to a formal offer, Volex intends to implement a mix-and-match facility, providing TT Electronics shareholders with additional flexibility in how they receive their consideration.
The FTSE 100 carved out gains on Thursday as sentiment improved, but investors should be wary gains for Uk stocks in recent sessions have quickly been sold into as choppiness after the US election persists.
US CPI released yesterday has weakened the pound against the dollar and supported the FTSE 100’s overseas earners, leading to a 0.5% rise for London’s leading index.
“The FTSE 100 ticked higher in early trading on Thursday despite weakness in the US and Asia overnight as American inflation edged higher,” says AJ Bell investment director Russ Mould.
“While the consumer prices reading wasn’t alarmingly high, it helped to stoke strong performance for the dollar again.”
Attention is starting to shift back to interest rates after the fanfare of the US election, and sticky US inflation has increased the chances of another US interest rate hike next month.
“With post-election clarity and seasonal optimism fuelling markets, investors are looking to Fed Chair Powell to don his best Santa outfit and deliver a rate cut next month, with markets giving odds of a cut at around 83%,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“CPI data came in as expected, easing inflation concerns that had nudged yields higher, though core inflation remains somewhat persistent. While semiconductors faced pressure, nearing a 10-month low relative to the S&P, stronger odds for a December lifted the broader index as markets wait eagerly for a gift from the Fed to cap off the year.”
The FTSE 100’s gains were fairly broad, with around 70% of the constituents trading in positive territory at the time of writing.
After releasing a reassuring trading update, Spirax Group was the FTSE 100’s top riser on Thursday with a 5% gain. Investors were desperate for some reassurance after the share price had more than halved from the 2021 highs, and this came in the form of robust organic sales growth for the first ten months of the year, which were higher than the comparable period last year. That said, the company will need to deliver further improvement in the coming quarters to bring down the fairly rich earnings multiple.
ConvaTec was the top faller as investors booked profits after the healthcare group surged earlier this week.
Aviva was another standout performer, gaining 4.8% on strong third-quarter results. The group enjoyed growth across all business units, particularly in the retirement and wealth.
“Insurance giant Aviva sounded pretty confident alongside third-quarter numbers, and the details contained within them mean it has every right to be,” Russ Mould said.
“The company is seeing strong performance across all of its business lines. Insurance is doing well thanks to disciplined pricing over the last 12 months while the company continues to see growth in its wealth management arm.
“Encouragingly, Aviva’s growing customer base now often has more than one policy per household. Increasing the proportion which do is an obvious growth opportunity for the business.”
Kodal Minerals (LON: KOD) remains on track with construction at the Bougouni lithium project in Mali and it is within budget of $65m. Full run rate production should be reached in the first quarter of 2025. Drilling suggests the mine life can be extended. Discussions continue with joint venture partner Hainan Mining over the $15m owed to the Mali government and whether it should be paid by Kodal Minerals and not the joint venture that owns the Bougouni lithium project. The share price recovered 15.9% to 0.365p.
Deltic Energy (LON: DELT) says Shell has provided an updated total well cost estimate of $48m for the Selene well site in the North Sea. Deltic Energy is carried for costs of up to $49m. There are plans for a second licence term as the partners move towards a final investment decision. This news and the full inclusion of tax losses has led Canaccord Genuity to increase its NPV10 share price target from 30p to 38p. The share price improved 15.4% to 5.25p.
Interim results from business software provider AdvanceAdvT (LON: ADVT) show revenues of £19.9m. Pro forma growth was 17%. At the end of August 2024, cash was £83.3m and the company still has a 9.8% stake in M&C Saatchi (LON: SAA), which increased in value by £4.26m during the period. Excluding that gain, pre-tax profit was £4m. The AdvanceAdvT share price increased 6.34% to 142.5p.
Wellhead safety technology supplier Plexus (LON: POS) has gained a $1m rental order for its Exact exploration wellhead equipment and related services from the Middle East. This an important breakthrough in that region. There are also opportunities for decommissioning in the North Sea. The share price rose 3.78% to 9.6p.
FALLERS
Mongolia-focused oil producer Petro Matad (LON: MATD) is having mixed fortunes with the Heron-1 well outperforming, but Heron-2 disappointing. Heron-1 is producing 200-300 barrels/day, and this could be quadrupled. Heron-2 production reached 30 barrels/day and has been suspended. Shore has cut its NAV estimate from 7.2p/share to 6.8p/share – mainly down to foreign exchange and changes in the oil price. The share price slumped 31% to 1.725p.
Phoenix Copper (LON: PXC) says NIU Invest is reviewing the Empire mine project ahead of setting out a new drawdown schedule for the $80m corporate copper bond. So far, $5m has been drawn down. The company is talking to other potential bond investors. There is enough cash to reach the second quarter of 2025. The share price dived 23.4% to 5.25p.
Decision intelligence software developer ActiveOps (LON: AOM) continues to add to annualised recurring revenues by winning new clients and generating higher revenues from existing customers. Net revenue retention is 108% and annualise recurring revenues reached £14.3m. Revenues were 10% ahead at £14.3m and pre-tax profit jumped from £100,000 to £470,000. There will be an increase in costs in the second half because of five additional sales and marketing personnel. This will hold back profit in the second half and Investec forecasts full year profit one-fifth lower at £1.6m. There is also going to be a relatively large client loss at the end of the year, which could knock 5% off year-end annual recurring revenues although new clients will more than make up for this. The fourth version of the main software product ControlIQ will be launched by the end of the year and two clients have been signed up. The share price dipped. The share price dipped 11.8% to 112.5p.
Ex-dividends
Anpario (LON: ANP) is paying an interim dividend of 3.25p/share and the share price fell 7.5p to 347.5p
James Halstead (LON: JHD) is paying a final dividend of 6p/share and the share price dipped 4.5p to 198.5p.
Mincon Group (LON: MCON) is paying an interim dividend of 1.05 cents/share and the share price is unchanged at 37p.
Portmeirion Group (LON: PMP) is paying an interim dividend of 1.5p/share and the share price is unchanged at 225p.
Wynnstay Properties (LON: WSP) is paying an interim dividend of 10p/share and the share price is unchanged at 710p.
The RICS Residential Survey for October has signalled a further improvement in the UK property market as buyer activity picks up and first-time buyers rush to beat the changes in stamp duty announced by Labour in the recent budget.
The RICS Residential Survey compiles the views of Chartered Surveyors who operate in the residential sales and lettings markets. They are asked how they feel house prices will perform over set periods and general questions about underlying housing activity.
Respondents reported positive developments in new buyer enquiries, agreed sales and sellers seeking to sell their homes. This uptick in activity was underpinned by a positive assessment of how prices will increase over the coming months.
Emma Cox, MD of Real Estate at Shawbrook, explained that “Despite uncertainty in the run up to the Budget, optimism continued to encourage new buyer enquiries and sales figures to grow in October as aspiring and current homeowners look to tie up transactions before the end of the year. With the stamp duty relief for first time buyers not being extended into the new tax year in the Autumn Budget, we can expect this to continue with first time buyers keen to complete prior to the end of March.”
“The new Government has reiterated the importance of a healthy property sector and there continues to be a clear need for a professional private rental sector in the UK. Therefore, we hope to see the Government working with professional landlords to support them to invest in their properties in order to continue to offer quality, energy efficient accommodation for our nation’s private renters.”
