Property finance provider Vector Capital (LON: VCAP) shares have recovered 7.14% to 15p even though trading will be cancelled on Monday. The company spent £3.5m on a tender offer at 33p/share.

A strong performance from Shire Foods meant that revenues improved from £19.1m to £22.2m at Volvere (LON: VLE). Pre-tax profit jumped from £440,000 to £1.78m. Net assets excluding non-controlling interests are 1585p. Cash is £24.3m. Further investments are being sought. The share price rose 6.38% to 1500p.

Berenberg cut its target price for Pan African Resources (LON: PAF) from 38p to 33p, but the share price improved 4.05% to 32.1p.

Iodine producer Iofina (LON: IOF) has commissioned its latest IOsorb plant in Oklahoma. The IO#10 plant is being tested and is the production will ramp up over the next few weeks. This is the seventh plant that is in production. There should be a material contribution to production this year.

FALLERS

Proteome Sciences (LON: PRM) reports a decline in interim revenues from £3.21m to £2.22m due to reduced and delayed R&D by biotech companies and almost quadrupled it loss to £2.15m. Chief executive Dr Mariola Soehngen will step down in January. The share price slumped 26.9% to 2.55p.

Premier African Minerals (LON: PREM) says that progress is being made towards the restarting of operations at the flotation plant at the Zulu lithium and tantalum project. The company will need further funding. The share price fell 9.73% to 0.051p.

Energy optimisation services provider Inspired (LON: INSE) shares continue to fall following interim results showing revenues edged up from £44.6m to £45m and pre-tax profit dipped from £6.2m to £5.7m. That was lower than forecast. The share price declined 8.4% to 54.5p.

Transense Technologies (LON: TRT) shares dipped 2.86% to 170p ahead of full year results on 23 September. They are expected to show an underlying pre-tax profit of £1.3m. The share price has risen 64% this year.

Technology Minerals has unveiled a comprehensive cost reduction programme aimed at streamlining operations and bolstering efficiency across the organisation today.

After generating zero revenue in the six month period to 31st December, the firm is taking steps to cut costs to ‘drive productivity’. One would assume the company is yet to generate enough revenue to support its wage bill. We will find out more in the full-year report.

Steps outlined by Technology Minerals include a significant redundancy scheme to reduce the total workforce, substantial cuts to head office costs, and an ongoing, thorough assessment of all service providers.

Philip Beard has agreed to step down from his roles as Independent Non-Executive Director and Chairman of the Remuneration Committee with immediate effect.

The reduction in Independent Non-Executive Directors has prompted a review of the Board’s future composition, which is likely to be a lot leaner in the future.

“These cost reduction measures have been identified as part of the Board’s efforts to increase efficiencies and drive productivity throughout every level of the business,” said Robin Brundle, Chairman of Technology Minerals.

“On behalf of the Board, I’d like to extend our thanks and appreciation to Phil for his contribution to the Company. We are grateful for all the strategic guidance Phil has provided to Technology Minerals and wish him the best in his future endeavours.”

Those investors seeking a profitable circular economy metals recycling company should look at UK-listed Majestic Corporation.

The company generated $29m revenue in the year ended 31st December, and profit before tax grew 149%. Majestic recycles a range of e-waste and renewable energy waste and is expanding in the UK after acquiring a business based in North Wales.

Primark-owner AB Foods took a pasting after the group said Primark sales would fall in the second half of the year due to poor weather and low footfall.

After losing roughly 18% of their value since August highs, AB Foods shares are currently firmly in oversold territory with an RSI of 21. The sharp decline should pique the interest of investors seeking an entry point with the long-term investment case intact.

The Weather

AB Foods has blamed slow sales in the second half on the weather. We all know how disappointing the British summer was this year, and companies heavily reliant on good weather to drive consumer purchases have been hit hard. AB Foods isn’t the only company to attribute bad sales to poor weather.

Primark is particularly reliant on in-store sales. Although it has been strengthening its online presence, Primark is still driving people into its stores by focusing on click-and-collect and the online shopping experience provides little help during a washout summer.

However, AB Foods used the same excuse earlier this year for slow sales growth in the first half. The winter was too warm and the summer too cold, according to AB Foods.

Investors have evidently grown tired of the same excuse and dumped the stock. For those with longer time horizons, this may provide an opportunity.

Primark’s same-store sales growth is fairly steady, and the company relies on new store openings for growth—this has proved a fruitful pursuit. The company is expanding across southern Europe, and new store openings are expected to increase US sales by 25% in the second quarter.

‘Build it, and they will come’ seems to be working for Primark. The brand’s low-cost clothing is a hit wherever it opens a new store.

The company plans further expansion in the US, which promises further growth in the years to come. Primark are also eyeing the Gulf Cooperation Council markets after signing an agreement with a local partner.

Investors should note that despite uneven sales growth, Primark’s margins are strong, and they expect operating margins to be higher in H2 2024 than H2 2023.

Food

AB Foods (as the name suggests) isn’t just the owner of Primark, and food sales account for roughly half group sales.

Sales from the food side of the business are expected to be steady in the second half and pose no major concern for investors, despite agriculture and sugar’s risk of adverse weather conditions. AB Foods uses the word ‘weather’ 15 times in its interim report to give you an idea of how much its business is dependent on Mother Nature.

All three food-related divisions saw operating profits grow in the first half of the year. However, due to sugar pricing in Europe, the company expects a disappointing second half for the unit, which may have contributed to the recent selloff.

Valuation

From a valuation perspective, AB Foods offer good value at 2,170p. They trade at 11x forward earnings and 15x historical earnings. The historical earnings multiple is reasonable, and the forward multiple, should estimates be meet, suggests very good value.

Don’t expect fireworks from AB Foods, but Primark’s overseas expansion plans and stable long-term earnings from the food business should support a move back to all-time highs above 3,000p.

Trainline shares were at the top of the FTSE 250 leaderboard on Thursday after the ticketing app announced strong sales growth in the first half of the year.

“Trainline sales are tracking ahead of analyst estimates with more consumers switching to digital tickets being one of the main drivers. It may not feel like it for many commuters but there has also been a reduced effect of strike action in comparison to last year,” said Adam Vettese, Market Analyst at investment platform eToro.

Trainline enjoyed revenue growth of 16% year-on-year in the first half, driven by a 13% jump in ticket sales. Investors will be pleased to see strength in the UK after a couple of soft periods for Trainline.

“Double-digit gains in net ticket sales and group revenue point to a fantastic first-half period for Trainline,” said AJ Bell investment director, Russ Mould.

“Acting as a big tailwind is a structural shift in the UK for people to use digital tickets rather than paper ones. As more people become accustomed to scanning their phone to get through station barriers, the bigger the opportunity for Trainline to position itself as the go-to place for buying these types of tickets.

“A second tailwind is increased carrier competition in mainland Europe, primarily in Spain and Italy. Trainline has been able to position itself as an easy way to navigate the increasingly complex travel system and get good deals.”

The FTSE 100 had a strong start to Thursday as London followed a decent for US shares ahead of the ECB’s rate decision later.

The catalyst was a surge in US tech stocks overnight, helping drive a turnaround in the S&P 500 yesterday. Markets also appeared to cheer the US CPI reading which almost nails on a rate cut next week. Such was the scale of the buying, the S&P 500 rallied around 140 points from yesterday’s lows into the close. The move from low to high was about 2.8% of the index value. 

“US markets bounced after the CPI inflation print all but secured the Fed’s first rate cut next week,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“CPI isn’t the Fed’s preferred inflation measure, but with a little bit of jigging, we can get a decent idea of what the preferred PCE number might look like, and it’s all starting to paint the same picture – inflation that’s behaving well. Markets are pricing in an 87% chance of a 0.25% cut, and there wasn’t much in this data to suggest a bolder move is needed.

An upbeat Nvidia CEO helped fire up AI-related stocks that were responsible for much of yesterday’s gains. The AI trade has been under pressure in recent weeks, but the 8% surge in Nvidia overnight shows there is still plenty of interest in the chipmakers, and investors are happy to continue deploying cash in the sector.

“Tech was back leading the charge, with the S&P 500’s chip sector up 6.65%. Nvidia’s had a bumpy ride of late, but markets were encouraged by CEO Jensen Huang’s bullish conference commentary on demand,” Britzman said.

The risk on trade was evident in the FTSE 100’s cyclical sectors, with miners surging higher and financials having a good day.

Copper miner Antofagasta was the top gainer, adding over 3.5%. Anglo American was not far behind, rising 3.2%. The lack of technology shares in London means investors often pick the next best thing in the cyclical mining sector when they are feeling confident about the outlook.

M&G was the top faller, but only because the stock traded ex-dividend today.

Investors will tune into the ECB’s rate decision later today, when we are expected to see another rate cut. A rate cut from the ECB will more than likely be followed by similar moves by the Fed and Bank of England next week.

It seems a long time ago that Fevertree shares were the talk of the town as the group established itself as a leading tonic brand in the UK and entered the US market. 

Fevertree shares are now worth less than 25% of what they were at their highs, and growth is disappointingly slow.

Once considered a drinks market disruptor, the group didn’t produce any revenue growth in the first half. Poor weather contributed to the soggy sales, but using that excuse usually means a company has nearly peaked in market share terms.

”Fevertree shareholders might be nursing sore heads this morning as the premium mixers maker posted a disappointing trading update, cutting its annual revenue growth forecast,” said Mark Crouch, Market Analyst at investment platform eToro.

Although the group enjoyed sales growth in the US in the first half, it was entirely offset by slowing sales in the UK. Total group revenue for the first half was down 2%.

The worrying signs for Fevertree were too much for investors on Thursday, and the stock slid by over 9%.

“Fevertree served up a mixed set of first-half results to investors. Revenue failed to bubble higher despite double-digit growth in the US where it continued to gain market share,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.

“The US is already Fevertree’s largest contributor to the top line, but there’s plenty of room to run given the size of this vast market. Performance in the UK and Europe wasn’t so spritely. Despite gaining market share in these regions too, revenue fell 6% and 10% respectively as poor weather and a tough consumer backdrop weighed on demand in the second quarter. While the weather which convinced some punters to stay at home is out of Fevertree’s control, it’s doing well to manage the factors that are within its control. It’s kept a tight lid on costs in the first half, and profitability is improving quickly as shipping rates, energy costs on glass bottles and wider inflationary pressures ease.”