Gary Channon, a Partner at Phoenix Asset Management Partners, the manager of the Aurora Investment Trust, details their investment thesis for Barratt Developments, explaining the extensive research techniques employed to value the company when the rest of the market shunned the housebuilding company
Top Digital Tools Every Investor Should Use for Better Performance
In the financial world, staying ahead requires more than just keen insight and experience. Modern investors must equip themselves with the latest digital tools to manage their investments effectively. These tools not only streamline processes but also provide real-time data and analysis, enhancing decision-making capabilities.
With so many digital solutions available, selecting the right ones can significantly impact your investment success. From managing portfolios and analysing market trends to maintaining secure and organised documentation, the right tools can save time and reduce errors. Efficient document management, in particular, is crucial, as it ensures easy access to important files, contributing to a more organised and productive workflow.
Essential Software for Managing Investment Portfolios
Various software solutions are available to help manage portfolios, providing tools to track performance, analyse market trends, and execute trades. These tools offer real-time data, ensuring that you can make informed decisions quickly and efficiently. Features such as performance tracking and risk assessment allow for a comprehensive overview of your investments, helping to identify potential areas for improvement.
One key benefit of portfolio management software is the ability to customise reports and analytics according to your specific needs. This flexibility allows investors to focus on the metrics that matter most to them, whether it’s tracking individual stock performance or assessing overall portfolio health. Many of these tools integrate seamlessly with other financial software, creating a cohesive ecosystem that enhances overall efficiency. By using dedicated portfolio management software, you can streamline your investment process, reduce manual errors, and stay ahead in the competitive world of investing.
Staying Informed with Real-Time Market Monitoring Tools
Keeping abreast of market developments is vital for making timely and profitable investment decisions. Real-time market monitoring tools provide investors with up-to-the-minute information on market movements, news, and trends. These tools enable you to set up alerts for specific stocks, indices, or market events, ensuring that you are always informed of critical changes that could impact your investments. The ability to receive instant notifications allows for swift action, whether it’s buying a promising stock or selling to avoid potential losses.
Real-time market data can be customised to suit individual preferences, focusing on specific sectors or asset classes. This personalisation ensures that the information you receive is relevant and actionable. Many market monitoring tools also offer advanced charting and analytical features, enabling detailed analysis of market trends and patterns. Utilising these tools helps investors gain a deeper understanding of market dynamics, make more informed decisions, and ultimately enhance their investment performance.
Streamlining Document Management for Investors
Efficient document management is a cornerstone of effective investing, ensuring that all important files are organised and easily accessible. Managing financial documents can be challenging, especially with the volume of paperwork generated through various transactions. Implementing a robust document management system helps keep everything in order, reducing the time spent searching for specific files and decreasing the risk of misplacing crucial documents.
One practical solution for managing large documents is to use a PDF compressor to reduce file sizes, making them easier to store and share. A reliable PDF compressor not only saves storage space but also ensures that files are quick to upload and download, facilitating smoother communication between stakeholders. For instance, using a PDF compressor can significantly streamline the process of sending large financial reports via email, ensuring that they are delivered promptly and without issues.
Adopting efficient document management practices helps investors focus more on their core activities and less on administrative tasks. Tools that simplify document handling, like a PDF compressor, are invaluable in maintaining an organised and productive workflow. This improves overall efficiency and increases the ability to access and review important financial documents quickly, leading to better-informed investment decisions.
Leveraging Data Analysis Tools for Better Decision-Making
Data analysis tools are indispensable for investors seeking to make informed decisions. These tools provide comprehensive insights into market trends, enabling the identification of potential investment opportunities. By utilising advanced algorithms and machine learning, data analysis tools can process vast amounts of information, revealing patterns and correlations that might not be immediately apparent. This depth of analysis helps investors make more accurate predictions about future market movements and make strategic investment choices.
Data analysis tools can help track performance metrics and evaluate the effectiveness of various investment strategies. This ongoing analysis allows investors to refine their approaches, optimising their portfolios for better returns. The ability to generate customised reports also means that investors can focus on specific areas of interest, whether it’s sector performance, individual stock analysis, or broader economic indicators. Integrating data analysis into your investment process gives you a competitive edge and helps you make more confident, data-driven decisions.
Improving Workflow Efficiency with Automation Tools
Automation tools are transforming the way investors manage their workflows, offering significant improvements in efficiency and accuracy. By automating repetitive tasks, these tools free up time for more strategic activities, such as analysing market trends and making investment decisions. Automation can be applied to various aspects of investment management, including trade execution, portfolio rebalancing, and reporting. This not only speeds up processes but also reduces the likelihood of human error, ensuring more reliable outcomes.
Automation tools often come with features that allow for real-time monitoring and adjustments. For example, automated trading systems can execute trades based on predefined criteria, ensuring that you capitalise on market opportunities as they arise. These systems can also continuously monitor market conditions and adjust strategies accordingly, providing a dynamic approach to investment management.
Adopting Mobile Apps for On-the-Go Investment Management
Mobile apps have revolutionised the way investors manage their portfolios, offering unparalleled convenience and accessibility. With a wide range of investment apps available, you can monitor your portfolio, execute trades, and access real-time market data from anywhere. These apps often come equipped with features such as customisable alerts, detailed analytics, and secure communication channels, ensuring that you have all the tools you need at your fingertips. The ability to manage investments on the go means you can respond quickly to market changes, maximising opportunities and mitigating risks.
Many mobile apps offer advanced features too, such as social trading where you can follow and replicate the trades of experienced investors. This can be particularly beneficial for those looking to learn from the strategies of successful traders. Mobile apps also provide educational resources, market news, and analysis, helping you stay informed and make better investment decisions.
Adopting the right digital tools is crucial for investors aiming to optimise their strategies and enhance their performance. By integrating software for portfolio management, you can keep track of your investments with greater accuracy and efficiency. Real-time market monitoring tools ensure you stay updated with the latest market trends and developments, allowing you to make timely and informed decisions. Data analysis tools further enrich your understanding by providing in-depth insights and uncovering patterns that inform your investment strategies.
Automation tools streamline various processes, reducing the need for manual intervention and minimising errors. This leads to more consistent and reliable outcomes, freeing up time for more strategic tasks. Mobile apps add another layer of convenience, offering the flexibility to manage investments on the go.
Embracing these technologies not only improves your operational capabilities but also positions you to make more informed and timely investment decisions. Enhance your investment approach with these digital tools to achieve better outcomes and stay ahead in a competitive market. Whether you are executing trades, monitoring your portfolio, or analysing market data, these digital tools ensure you have everything you need at your fingertips.
1Spatial – Do Not Underestimate The Significant Growth Potential Of This Global Spatial Awareness Specialist
Investors prepared to take early-stage positions in companies offering massive market potential really should be putting 1Spatial (LON:SPA) into their portfolios.
Today this group is only capitalised at £78m, yet it is on the verge of boosting its revenues significantly within just a few years, which could see it valued at several times more than currently.
Some 92% of the company’s equity is held by investment professionals, which is a very good pointer of its prospects.
The Business
A global leader in Location Master Data Management, the group helps more than 1,000 organisations unlock the value of their data by validating, auditing, cleansing, correcting, synchronising and enhancing their spatial and non-spatial data.
Demand for current and authoritative geospatial data has never been greater.
In every sector, organisations are using location data to make better decisions – improving profits, saving time and saving lives.
Its solutions ensure data governance, facilitating the efficient, effective and sustainable operation of customers around the world.
Its global clients are primarily within the Government, Utilities and Transport sectors and include national mapping and land management agencies, utility companies, transportation organisations, government and defence departments.
The Cambridge-based group has operations in the UK, Ireland, the USA, France, Belgium, Tunisia, and Australia.
Going For Strong ARR
I love to see company’s building up their annual recurring revenues and that is one of the aims of this enterprising group.
Earlier this month it demonstrated material progress on the group’s US expansion plans, when it declared that it had secured several new contracts in the US, an area of importance in its global growth.
1Spatial now has contracts or framework agreements with 21 US States, up from 18 US States at the year end.
The group states that its US business has considerable expansion potential, where it has an ambition to generate on average $1m ARR from each State per annum.
These repeatable solution sales contribute to the Group’s increasing levels of recurring revenue and provide good revenue visibility from the Group’s US operation.
CEO Claire Milverton stated that:
“We continue to see considerable opportunity in the US, supporting the digital transformation of transport and emergency services departments, for which accurate, reliable, and up to date location data is vital.
These wins and the renewal demonstrate the quality of our product and underpin our ambition to generate on average $1m in ARR from each State per annum. Alongside our newly launched SaaS offerings, the Company has a number of growth vectors available to deliver on its ambitions.”
AGM Trading Update
Earlier this month, at the group’s AGM, Chairman Andrew Roberts updated investors stating that:
“Trading for the full year is expected to be in line with expectations.
We have secured several new contracts in Europe and the US in recent months, and we continue to make progress with our innovative 1Streetworks SaaS offering.
Planned targeted headcount increases across the US Enterprise and 1Streetworks businesses are well underway.
With the onboarding of an NG9-1-1 (public safety) specialist in May and a highly experienced sales director joining the Company early in H2 to strengthen the 1Streetworks team.
This reflects our approach to ensure our sales and delivery teams have a greater sector focus.
The Group has a strong order book, a growing recurring revenue stream and substantial sales pipeline underpinning the Board’s confidence in the outturn for FY25.
We believe the investments we continue to make in people and technology have positioned the business well to take advantage of the huge opportunity ahead.”
The Equity
There are some 111m shares in issue.
Around 92% is held by institutional investors.
The largest holder is Threadneedle Asset Management with 19.94% of the equity.
Other large holders include Canaccord Genuity Wealth (16.62%), Azini Capital Partners (12.37%), Harwood Capital (6.70%), BGF Investment Management (6.25%), Liontrust Investment Partners (4.92%), Perpetual Investment Management (3.96%), Herald Investment Management (3.56%), Octopus Investments (3.48%), and Hargreaves Lansdown Asset Management (3.42%).
Analyst’s Views
At Panmure Liberum analysts Andrew Ripper and Caspar Erskine rate the group’s shares as a Buy, looking for 80p a share as their Price Objective.
They are going for the current year to end January 2025 to show through with sales of £37m (£32m) and pre-tax profits of £2.4m (£2.1m), lifting earnings to 2.1p (2.0p) per share.
For the coming year they see £40m revenues, with £3.9m profits and 3.0p per share in earnings.
My View
ARR – I just love it!
Any sensible Finance Director wants to enjoy the strong build-up of annual recurring revenues, it strengthens financial armour when funding growth, especially on a global scale.
It will be a slow accretion of contracts but there will soon be a point where 1Spatial’s business will almost be self-feeding.
At the current 71p this group’s shares are a cracking growth stock for patient and risk-tolerant investors.
Note – Investors should review further articles and presentations on this group featured on this website in March this year.
Easyjet profits jumps as passenger numbers increase
Easyjet investors will be delighted Ryanair’s problems are not industry-wide. Easyjet shares sank earlier this week after its peer announced falling profits and said it would cut its fares. Easyjet is experiencing no such problems.
EasyJet has reported a strong performance in its third quarter with headline profit before tax increasing 16% to £236 million as passenger numbers increased by 8% year-on-year, reflecting robust demand absent from Ryanair’s recent update.
Revenue per seat (RPS) also saw a modest increase of 1% year-on-year, aligning with the company’s guidance.
The easyJet holidays division performed exceptionally well, delivering £73 million in profit before tax, up from £49 million in the same quarter last year. This represents a remarkable 49% growth in profitability, accompanied by a 33% increase in passenger numbers for the holiday segment. The success of this division is contributing significantly to the overall positive performance of the company.
“Our strong performance in the quarter has been driven by more customers choosing easyJet for our unrivalled network of destinations and value for money,” said Johan Lundgren, CEO of easyJet.
“This result was achieved despite Easter falling into March this year, demonstrating the continued importance of travel and this means we remain on track to deliver another record-breaking summer, taking us a step closer to our medium term targets.”
Looking ahead, the airline said it expects to reach a capacity of approximately 100 million seats for FY24. Furthermore, the fourth quarter of 2024 is anticipated to continue the positive trend seen in Q3, with revenue per seat expected to maintain its upward trajectory. Easyjet may well be eating Ryanair’s lunch.
The holiday division is projected to deliver over £180 million in profit before tax, representing more than 48% profit growth year-on-year.
Bookings for the fourth quarter are strong, with 69% of capacity already sold, which is 1 percentage point higher than the same period last year. Additionally, easyJet has 7% more capacity on sale. This translates to 1.5 million more seats sold for the peak summer period compared to the previous year.
Reckitt Benckiser announces simplification strategy disposing of leading brands
Reckitt Benckiser shares underperformance has elicited a response from management who today announce a strategy to streamline the business by disposing of non-core brands and focusing on so-called ‘Powerbrands’.
In the face of margin pressure and shifts in consumer behaviour, Reckitt Benckiser is embarking on a major transformation with plans to sharpen its brand portfolio, focusing on high-growth, high-margin Powerbrands that dominate their categories. This strategic shift top acheive a ‘sharper, simpler Reckitt’ follows a comprehensive nine-month review.
The reshaping involves significant disposals. Reckitt will exit its ‘Essential Home’ portfolio by the end of 2025, which includes well-known brands like Air Wick, Mortein, Calgon, and Cillit Bang. These brands generated £1.9 billion in revenue for FY2023. Additionally, the Mead Johnson Nutrition business, featuring Enfamil and Nutramigen, is now considered non-core. Reckitt will explore all strategic options for these assets to maximise shareholder value.
The focus will now be on ‘Powerbrands’ – Reckitt’s core portfolio is thriving. Powerbrands such as Mucinex, Strepsils, Gaviscon, Nurofen, Lysol, Dettol, Harpic, Finish, Vanish, Durex, and Veet have demonstrated strong performance. This group has achieved a 7% net revenue CAGR between FY2018 and FY2023, with an impressive 61% gross margin in FY2023. Emerging brands like Move Free and Biofreeze, along with local heroes such as Lemsip and Airborne, will also be part of the future-focused portfolio.
Cost optimisation is a key component of the new strategy. Reckitt aims to streamline its organisation, reducing management layers and duplication. The company will transition to a unified category structure operated through three geographical regions: North America, Europe, and Emerging Markets. This restructuring is expected to yield significant savings, with a targeted 300 basis point reduction in fixed costs by 2027. The end goal is to reduce the fixed-cost base from 22% to approximately 19%. However, this transformation comes at a price, with estimated one-off cash restructuring and transformation costs of around £1.0 billion.
The new Reckitt will emerge on January 1, 2025, reporting financials in three segments: Reckitt, Essential Home, and Mead Johnson Nutrition. While the core Reckitt business focuses on health and hygiene, dedicated teams will manage the Essential Home and Mead Johnson Nutrition segments to maximize their potential value. Through these strategic moves, Reckitt aims to create a leaner, more agile company poised for long-term growth and shareholder value creation.
FTSE 100 reverses early losses as Compass Group leads index higher
The FTSE 100 reversed early losses on Tuesday after traders bought into a sell-off in mining companies in the very early hours of the session. Strong results from Compass Group helped the index carve out gains.
Having touched lows of 8,152, the FTSE 100 rebounded to trade at 8,226, 0.3% higher on Monday.
“The FTSE 100 was dragged down by a poor showing from the mining sector off the back of a weak copper price,” said Dan Coatsworth, investment analyst at AJ Bell.
“Copper futures have fallen by nearly 7% over the past five days amid concerns about sluggish demand from China as it struggles with a slowdown in economic growth. The market has taken the view that China isn’t digging deep enough with stimulus measures to fire up the economy and therefore commodities demand is at risk.”
However, concerns about China took a back seat as the session progressed, and investors shifted their attention to Compass Group’s strong earnings and a reassuring statement from Beazley.
Compass Group was the FTSE 100’s top riser after delivering a very respectable 10.3% increase in organic revenue in its third quarter, helped by strength in North America and Europe. The food services company upgraded its profit outlook, saying it expected operating profit growth for the year would be above 15%, and shares reacted accordingly with a 4% increase.
“Food service giant Compass continues to attract new business at pace, helping to support a second upgrade to annual forecasts this year,” Coatsworth said.
“This suggests the company’s decision to ease prices in line with inflation is a good one as it helps drive loyalty among existing customers and attract new ones, bolstering an already strong market position. It also suggests a return to the office – as hybrid working policies are adjusted – is proving beneficial.
“The company and its management team see plenty more business to go after, with a large chunk of catering still done in-house.”
Beazley was the second-highest riser after issuing a statement to calm any fears about the impact of last week’s tech outage. The cyber security insurer’s shares were hit heavily by concerns it would have to fork out for claims but today said its guidance for the year remained unchanged by the events.
The bottom of the leaderboard was littered with miners such as Anglo American, Glencore and Rio Tinto as the impact of commodities selloff lingered.
AIM movers: Ocean Harvest hit by destocking and SkinBioTherapeutics clears up convertibles
SkinBioTherapeutics (LON: SBTX) has received the final conversion notice from Macquarie for £480,000 of bonds. There will be 5.85 million shares issued at 8.207064p/share. There will be no more drawings on this facility. The share price improved 15.1% to 10.475p.
Deltic Energy (LON: DELT) says that the Valaris 123 drilling unit is on route to the Selene well location in the North Sea. Shell is the operator and Deltic Energy has a 25% working interest and it is carried for up to $49m of well costs. The share price is 9.3% higher at 11.75p.
Investor platform operator ADVFN (LON: AFN) has launched its easy-to-use AI tool that enhances investor decision making. Phase two has started and involves the rollout of enhancements to additional countries. That will be followed by further enhancements of the platform. A new mobile app is being tested and should be released by the end of the third quarter. The share price is up 7.69% to 14p.
Promotional goods platform Altitude Group (LON: ALT) says full year EBITDA will be £2.4m, compared with the forecast of £2.2m, even though revenues were lower than expected. First quarter trading is strong. The share price increased 6.98% to 46p.
Transport analytics provider Cordel (LON: CRDL) says revenues were at least £4.4m in the year to June 2024, up from £3m. Further growth is expected this year, and the focus is profitability. Cash was £1.02m at the end of June 2024. Cavendish has been appointed broker. The share price rose 5.56% to 4.75p.
FALLERS
Seaweed-based animal feed producer Ocean Harvest Technology (LON: OHT) says interim revenues declined 46% to €950,000 and full year forecast revenues will be well below the previously expected level of €6.1m. Forecasts are under review. Two major accounts have not placed orders this year due to their high inventories. There will be an update on prospects in the interim announcement in September. The share price dived 32.6% to 7.75p.
Early selling pushed down the Silver Bullet Data Services (LON: SBDS) share price by 21.1% to 75p.
Energy supplier Yu Group (LON: YU.) increased revenues by 60% in the first half and cash has increased to £86.8m, but the share price is 12.4% lower at 1655p. Lower prices mean that monthly average bookings have declined by 9% and that will hit operating margins. These factors mean that SP Angel is keeping its full year pre-tax profit forecast at £44.5m even though interim revenues grew much faster than expected.
Podcast platform Audioboom (LON: BOOM) reported flat revenues of $17.1m in the third quarter and EBITDA was positive. There was a decline in gross margin due to the end of the peak advertising related to the US fantasy sport season. Net cash is $3.5m. Cavendish is maintaining its full year forecast revenues of $78.8m and a pre-tax profit of $900,000. The share price fell 9.4% to 226.5p.
Zephyr Energy (LON: ZPHR) has completed the initial phase of testing of the State 36-2R LNW-CC well in the Paradox Basin, US. Peak production rates were 1,350 barrels of equivalent/day even though the well was choked back and constrained. There is a higher condensate yield than nearby wells and this will be attractive to Utah refineries. There is little water production. However, the natural fracture network may be partially obstructed. Zephyr Energy will try to remove drilling mud emulsions that could be blocking the fracture and that will cost a few hundred thousand dollars. The share price dipped 8.6% to 4.25p, but it is still 57% higher this year.
Identifying high-quality UK small caps with Aberdeen UK Smaller Companies Growth Trust
The UK Investor Magazine Podcast was delighted to be joined by Abby Glennie, Deputy Head of Smaller Companies at abrdn, for a deep dive into UK smaller companies and the abrdn UK Smaller Companies Growth Trust.
We start with a discussion about the strategy, looking at the trust’s bottom-up approach to UK smaller companies. Abby details a strategy and screening process that seeks out companies meeting strict criteria for quality, growth and momentum.
Visit the abrdn UK Smaller Companies Growth Trust website.
Abby explains the key themes for abrdn UK Smaller Companies Growth Trust and outlines the opportunities and challenges in the coming periods.
We look at the macro influences driving stock selection, and Abby outlines her views on how a UK interest rate cut will benefit the UK small-cap space.
We run through a selection of holdings within the trust and why the team sees value in these particular UK smaller companies. Abby highlights Cairn Homes as their pick of housebuilders and we discuss why the company stands out.
The podcast concludes with a selection of portfolio companies that excite Abby the most, including recent IPO Raspberry PI.
IQE revenue surges 25% in first half
IQE revenue is set to jump in the first half after the compound semiconductor wafer product market recovered during the period.
The company, listed on AIM, expects to report revenue of at least £65 million for the period ending 30 June 2024, representing a 25% year-on-year increase compared to the £52 million reported in the first half of 2023 and 3% increase on the second half of 2023.
IQE shares were 1.79% higher at the time of writing.
“I am pleased with the performance we have delivered for H1, in an industry which will remain in recovery throughout 2024. As markets correct at varying paces, we remain confident in our diversification strategy which will enable us to take advantage of the growth opportunities ahead,” said Americo Lemos, Chief Executive Officer of IQE.
Luceco warns of soft industry metrics despite strong first half
Luceco, the prominent supplier of wiring accessories, EV chargers, LED lighting, and portable power products, has announced reasonable revenue growth for the first but warned key industry metrics remained weak.
The company’s shares were 1.78% lower at the time of writing as investors reacted to concerns about the outlook.
Revenue for the first half of 2024 reached approximately £109 million, representing an 8% increase year-on-year. On a like-for-like basis, revenue growth stood at 3.5%, indicating organic expansion across the company’s product lines.
Profitability has shown marked improvement, with adjusted operating profit expected to reach £12.5 million, a substantial 15% increase compared to the same period last year. The company’s focus on operational efficiency is evident in the adjusted operating margin, which improved by over 80 basis points to reach approximately 11.5%.
“Luceco performed strongly in the first half against a challenging market backdrop. The Group’s diverse portfolio and channels have ensured that we continue to deliver progress, with adjusted operating profit up around 15% in H1 2024,” said Chief Executive Officer, John Hornby.
“Our acquisition of D-Line, which completed in February 2024, is expected to add circa £15m of sales this year and has integrated well into the Group. The balance sheet remains strong with debt levels towards the lower end of our target range, giving us flexibility to pursue new organic and M&A opportunities in line with our indicated capital allocation policy.”