Shell shares rose on Thursday after the oil majors released Q3 earnings and announced a fresh $3.5 billion share buyback.

Shell was one of the few FTSE 100 gainers after its Q3 results revealed better-than-expected profits across its fossil-fuel-focused business units.

Perhaps the biggest influence on shares was the expansion of their share buyback programme.

Nick Purves, Fund Manager of the Temple Bar Investment Trust, recently discussed the attractions of Shell’s buybacks on the UK Investor Magazine Podcast. Nick Purves explained that the long-term trend of buying back shares underpinned their investment case and was an integral element in Shell’s place as the trust’s top holding.

The broader market evidently shares this sentiment, and Shell’s shares rose 1% in early trade on Thursday despite the broad losses of the FTSE 100.

“Shell’s delivered a significant third-quarter beat driven by better-than-expected results in all division bar renewables,” said Derren Nathan, head of equity research, Hargreaves Lansdown.

“That’s given management the confidence to push the button on a $3.5bn buyback, marking the twelfth consecutive quarter where plans to repurchase $3bn or more have been announced. That’s impressive stuff in the context of weak commodity prices and industry-wide pressures on refining margins.”

Despite weakness in fossil fuel prices, Shell remains a cash-generating machine, producing $10.8bn free cash flow in Q3 2024 compared to $7.5bn in the same period a year ago.

“At the same time, Shell’s still managing to shrink its net debt pile, paving the way for further shareholder distributions. With capital expenditure now set to come in below guidance for 2024, investors will be paying close attention to Shell’s capital allocation plans for 2025 when full-year results are announced,” Nathan said.

“Integrated Gas and Upstream remain the key profit drivers and whilst the range of outcomes for production in the fourth quarter is a little wide, the short-term outlook looks broadly stable. Looking further ahead, plans to develop new fields as well as upgrade existing assets in the Gulf of Mexico should help keep production moving in the right direction. Shell’s financial discipline is highly impressive, and for now, it seems to be finding the right balance between rewarding shareholders and investing in growth. But any further pullback in investment spend could raise some questions on the group’s ability to future-proof the business.”

Next is making a habit of increasing its profit guidance. Strong online sales in the third quarter were the driving force for the most recent upgrade to profits, which are now expected to exceed £1bn for the full year period.

The retailer is proving to be a sales growth juggernaut, with total full-price sales increasing 7.6% between August and October. Next, traditionally known for the queues of people eager for a bargain outside their stores on Boxing Day, are now enjoying the highest sales growth rates in the online arena.

Next’s UK online sales grew 7.9% during the period compared to only 2.9% growth in traditional retail sales.

Investors were clearly pleased with the news, and Next shares were 2% higher at the time of writing. This adds to a sterling run for Next shares this year, which has seen an appreciation of 26% year to date.

“Next extended its hot streak of positive results as profit guidance was nudged higher yet again, just six weeks after the last upgrade,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.

“The early arrival of cold weather this year is being thanked for helping to deliver better-than-expected full-price sales across September and early October, as consumers scramble to update their winter wardrobe. That tailwind’s expected to continue into the fourth quarter and keep boosting sales.

“Skyrocketing demand in its online channel remains a running theme, but it was pleasing to see retail sales return to growth in the period too. Looking forward, the online channel is likely to remain the main growth driver. It already brings in more than half of the group’s sales, and expansion overseas is still in its infancy. Around 90% of overseas business currently comes from Europe and the Middle East, both of which can be serviced quickly and cheaply from the UK. Given the untapped size of these markets, and increased traction in new markets, there’s a big opportunity if Next can execute its expansion plans well.”

Next will be one of the first retailers to announce festive trading, with sales up to 28th December pencilled in to be released 7th January.

MicroSalt shares soared in early trade on Wednesday after the food technology made a landmark announcement regarding the progress of its B2B business and partnerships with some of the world’s largest food manufacturing companies.

MicroSalt has announced game-changing orders and commitments for their low-sodium salt, including fresh orders for new product lines and repeat orders by a major food manufacturer.

MicroSalt’s New Initial Orders

In a statement released on Wednesday, the company said it had received an initial order for 50,000 lbs of their salt, equivalent to 22 metric tonnes.

The company has not revealed the specific products or customers, but the order size infers MicroSalt is now an integral part of a globally recognised product line.

“We are very excited to have received a significant new initial order for MicroSalt to replace traditional salt in a major product line, adding to product lines previously launched with a globally recognised customer,” said Rick Guiney, CEO of MicroSalt.

As a hypothetical example of the sheer scale of the new order, we ran the numbers using the salt content of crisps, one of the UK’s most loved snack foods.

A 25g packet of Walkers Ready Salted Crisps contains 0.34g of salt. A Sainsbury’s own brand 25g packet of prawn cocktail crisps contains 0.27g of salt while salt & vinegar crisps contain 0.40g.

If we take the average of these three crisp products, we can very roughly conclude that the average 25g packet of crisps has 0.33g of salt.

Should MicroSalt have sold the 50,000 lbs of salt to a crisp manufacturer, they would have enough salt to make over 68 million packets of crisps. To put that into context, the UK is estimated to consume 8 billion packets of crisps per year. And that’s by just 70 million in the UK. 

We use crisps as an example because MicroSalt didn’t share the exact manufacturer or product, presumably because the food manufacturer who made the order wants to keep their solution to reducing sodium content in their products under wraps. MicroSalt has previously alluded to working with snack food companies, so crisps represent a sensible assumption.

The sale could have been to a bread manufacturer,  a pretzel maker, or even a producer of microwave meals.

While we don’t know the exact end product or partner who made the order, we can reasonably assume whoever made the order is a serious food manufacturer. 

Coincidentally, if the order were for bread rolls, the order would be enough to produce 36 million rolls, using the salt content of Waitrose floured baps as an example. 

These are very rough assumptions and don’t consider any wastage during manufacturing or whether the same amount of MicroSalt salt and traditional salt is used.

That said, food manufacturers don’t make this sized order as a test, regardless of the end product. 

The scale of the initial order, and the annualised projection, would suggest one of the world’s leading food manufacturers has reformulated one or more major lines to include MicroSalt, which is now ingrained in the manufacturing process.

MicroSalt has previously said it was engaged in testing with major food producers. Today’s announcement confirms these tests were successful.

If a major food manufacturer has reformulated a product line to include MicroSalt, they could work it into other products. If one major food manufacturer has included MicroSalt in their product, there’s a reasonable chance others will follow suit. 

Today’s announcement provides evidence for this. MicroSalt’s Mexican partner is making repeat orders, and the firm’s low-sodium salt will soon be used in cereals, spice mixes, and energy bar products.

“Based on our ongoing discussions and the progress to date, we are also looking forward to the addition of Microsalt to other well-known product lines for this customer,” Guiney explained.

“Our progress within the spice and ingredient community as well as the successful efforts put forth at the SIAL event in Paris last week, is evidence that the hard work put in by the Microsalt team is bearing fruit globally.”

While the new initial orders demonstrate wider market adoption, news that one of MicroSalt’s first sizeable customers is continuing to purchase salt at an annualised rate of 640,000 lbs is probably the most significant takeaway from today’s announcement.

This is enough salt to supply multiple lines of the world’s most popular products.

MicroSalt shares have reacted accordingly, soaring over 40% in early trade.

Tekcapital portfolio company Innovative Eyewear has rocketed higher in US trade after the smart eyewear company announced the launch of its safety eyewear range, opening the doors to entirely new sectors in industry, manufacturing and construction.

The new product represents the first-ever ANSI Z87.1-certified smart safety eyewear that combines industrial-grade protection with advanced technological features.

The smart safety eyewear integrates ChatGPT capabilities, adaptive light-sensitive lenses, and walkie-talkie functionality into a lightweight, prescription-compatible design.

Built for diverse professional environments, including construction, healthcare, and logistics, Lucyd Armor features an impressive 8-hour battery life and employs Bluetooth 5.3 technology. The design includes patent-pending touch controls specifically engineered for use with gloves or wet hands alongside AI-powered noise-reduction microphones for clear communication in noisy environments.

Innovative Eyewear have clearly taken into consideration the demands of the end market and built in photochromic lenses with anti-fog and anti-scratch coatings come standard, while an open-ear audio system allows workers to maintain environmental awareness while accessing AI assistance or communication functions.

The product’s integration with multiple AI assistants, including ChatGPT, Siri, and Google Voice, positions it as a potential game-changer in workplace safety and productivity enhancement.

These features could make Innovative Eyewear’s products an essential tool for workers, providing the smart eyewear company with additional revenue streams.

Investors welcomed the development, with Innovative Eyewear shares rising 33% in US early trade.

“Lucyd Armor sets a new standard in protective eyewear,” said Harrison Gross, CEO of Innovative Eyewear, Inc.

“We’ve combined cutting-edge technology with rigorous safety standards to offer professionals a smarter, more efficient way to stay protected on the job. This launch reflects our vision to lead the evolution of wearable tech in industries where safety and performance go hand in hand. It’s time to Upgrade Your Eyewear^® with Lucyd Armor™ – there is nothing quite like it for working men and women.”

The FTSE 100 was helped higher by strong results released by HSBC on Tuesday as investors geared up for tomorrow’s budget and the announcement of a raft of measures that could have significant implications for the UK economy and stock market.

London’s flagship index carved a gain in early trade, with China-focused stocks piggybacking on HSBC’s upbeat results and investors preparing for US earnings from major technology companies.

“The FTSE 100 ticked higher on Tuesday, helped by some positive corporate results as investors await earnings updates from the US tech sector and tomorrow’s Budget,” said AJ Bell head of financial analysis Danni Hewson.

“A huge chunk of the S&P 500 are reporting this week including five of the Magnificent Seven, so investors will get an excellent sense of the overall shape of the US third-quarter earnings season over the next few days. Although any market focus on earnings will rapidly be diverted to next week’s presidential election and Federal Reserve meeting.

“In London, positive numbers from HSBC helped lift other Asia-focused financials like Standard Chartered and Prudential.”

Despite starting the session on the front foot, the FTSE 100’s gains ebbed as the session progressed and was trading almost flat at the time of writing.

A 2% drop in BP shares offset strength elsewhere after the oil major revealed its worst quarterly earnings report in nearly four years.

“Refining margins continue to be a thorn in bp’s side, being the key driver in the $1bn fall in third-quarter underlying replacement cost profit,” said Derren Nathan, head of equity research, Hargreaves Lansdown.

“The knock-on effect on cash flow, as well as increasing investment spend, saw net debt tick up to $24.3bn. However, bp is holding its nerve, upping the dividend from 7.27c to 8.0c and releasing another $1.75bn to buy more of its own shares, which are down 24% over the last six months.”

Budget

Investors will be all too aware of tomorrow’s budget and the implications for UK equities. Given the potential risks to the UK stock market, UK shares are relatively muted. There is an argument traders have already priced in any potential measures given the newsflow around the budget and predictions of tax changes for investors and businesses.

“Retail investors are bracing themselves ahead of what is widely expected to be one of the most significant Budget days of recent years. Rachel Reeves has had only a few months to determine the magnitude of the UK’s fiscal challenges, let alone work out the measures needed to correct the course and enable the new Government to start to execute its plans,” said Steve Clayton, head of equity funds, Hargreaves Lansdown.

“Changes to pensions, capital gains tax, inheritance tax and employers NI have all been mooted in the press. Tomorrow we find out the reality of it all. The headline numbers look likely to be big, with estimates of the sums needing to be raised having risen to as much as £40bn.”