Next Tuesday this £176m capitalised estate agency group will be holding its AGM covering its 2023 results, which were gently better than those of 2022.

The Foxtons Group (LON:FOXT), which is London’s leading estate agency and largest lettings agency brand, with a portfolio of over 28,000 tenancies, saw revenues of £147.1m (£140.3m) for the year, with adjusted pre-tax profits of £13.8m (£13.1m) but lower earnings of 2.8p (3.0p) and a maintained dividend of 0.9p per share.

Recent Q1 Trading Update

Two weeks ago, the group gave out a Q1 Trading Update for 2024, showing a 9% advance in revenues at £35.7m for the three months to end March.

CEO Guy Gittins stated that:

“This has been a strong start to the year with our revenue growth demonstrating the real momentum we have built across the business. Last year we regained our number 1 position in London and delivered significant growth in our market share of property instructions across both Lettings and Sales. The business is now focussed on converting these listings to transactions as we deliver results for our clients.

Sales revenue was up 17%, reflecting improved market conditions and Foxtons’ continued growth in market share as the operational improvements we made last year took effect. We entered the second quarter with the highest value under-offer Sales pipeline since the 2016 Brexit vote, giving us optimism for the rest of the year.

We have made great strides in the past two years, with the business’ foundations rebuilt and the Foxtons Operating Platform significantly strengthened. We are well placed to continue to unlock value within our business, drive growth, and ultimately deliver against our medium-term adjusted operating profit target.”

The Group’s Strategy Going Foward

The strategy of the group is to accelerate growth and deliver £25m to £30m of adjusted operating profit in the medium-term, by focusing on non-cyclical and recurring revenues from Lettings and Financial Services refinance activities, supplemented by market share growth in Sales.

Broker’s View – Price Objective 88p

Analyst Greg Poulton at Singer Capital Markets rates the group’s shares as a Buy, with a Price Objective of 88p.

He is now estimating current year revenues of £158.3m, £17.0m profits, 4.0p earnings and a 1.10p dividend per share.

Over the next two years to end 2026 he sees revenues rising to £179.6m, £25.2m profits, 5.9p earnings and a 1.50p per share dividend.

My View – Looking For 80p A Share

The market in the group’s shares is interested to know just how its brokers and Rothschilds will be faring in attempting to get FOXT a much better rating than at present – with suggestions that the whole group is up for sale to the right bidder.

Could we be getting any update on their joint progress to date?

Probably not – but it would be good to excite some more interest in the group’s shares, which are currently trading at around 58p.

If a potential predator is being sought and lined up in due course, it would be reasonable to look for a bidder having to offer at least 80p a share, some £240m in value.

Another day and another fresh intraday high for the FTSE 100. The wind is certainly in the sails of London’s leading index, with HSBC and Whitbread providing the uplift on Tuesday.

The FTSE 100 hit highs of 8,199 before retreating to trade at 8,176 at the time of writing.

“The spigot has been opened since it attained its new record high and the FTSE 100 continued to flow higher on Tuesday amid a raft of corporate announcements,” said Russ Mould, investment director at AJ Bell.

“The index took its cue from gains on Wall Street with the next key test of the relative optimism displayed by the market coming tomorrow with the latest meeting of the US Federal Reserve.

“While the Fed is expected to maintain the status quo on interest rates, commentary on its current thinking on the trajectory of rates in the remainder of the year will likely have a significant impact on markets.”

A strong start to the session was amplified by upbeat earnings from Whitbread and HSBC. HSBC gained 4.3%, adding a significant number of points to the index, after announcing Q1 earnings that beat analyst estimates.

HSBC

HSBC has fallen in behind most other FTSE 100 banks that have reported Q1 earnings by marginally beating income and profit estimates.

In addition to earnings, investors gained insight into the bank’s progress in delivering a strategy to move away from non-core assets. The sale of their Canadian assets is complete, but the bank recorded $1.1bn write-down on its Argentinian business as it prepares it for sale. 

A fairly solid set of Q1 results was overshadowed by the news that the HSBC CEO was planning to retire, raising questions about the direction of the company in the coming years. That said, investors clearly weren’t too upset with the news, given the reaction in shares today.

“HSBC has thrown a spanner in the works. News that CEO Noel Quin plans to retire came as a surprise. Change at the top usually causes a wobble, more so when it’s unexpected, and this does raise some questions about how the strategy will evolve from here. The HSBC portfolio is going through a reshuffle, and Quin’s far from completing his mission to get costs under control,” said Matt Britzman, equity analyst, Hargreaves Lansdown.

Whitbread

Whitbread was the FTSE 100’s top gainer as investors cheered a record year for profit before tax in 2024FY and signalled great focus on its hotels in business in the future.

Revenue jumped 13%, and profit before tax rose to 36% to £561m as the German Premier Inn business stormed ahead from a low base amid soggy food sales in the UK.

“Whitbread’s served up a set of record beating results for the 12 months ending 29 February 2024. Premier Inn UK has continued to outperform the rest of the market and management are seizing the opportunity to convert 112 restaurants into 3,500 new room extensions,” said Derren Nathan, head of equity research, Hargreaves Lansdown.

“This appears to be a shrewd way to optimise the current real estate footprint and a capital efficient method to help reach the 2029 target of an estate of at least 97,000 rooms. 

“The comps are getting harder for Whitbread though. Food & Beverage is struggling so far this year, with sales 2% behind last year and it’s some of these weaker performing branded restaurants, which include the likes of Beefeater and Brewers fayre, that Whitbread has put forward for conversion.”

Prudential

Prudential was firmly at the bottom of the index on the news of poor sales in China.

“Shares in Asia-focused insurer Prudential were under pressure after a decidedly mixed first-quarter update. While there was evidence of a recovery in some key markets, its mainland Chinese venture CITC Prudential Life saw a significant year-on-year decline in sales,” Russ Mould said.

Prudential shares were down 5% at the time of writing.

Last week, we suggested that the index was more likely to recover towards 5,200 than continue the recent slide, so the minor recovery in the past few days has been largely in line with expectations.

There were some minor concerns last week on bad GDP data, and of course we had sizable moves lower from heavyweights such as Nvidia and Meta.

However the wider market held last week’s lows and buyers moved back in with enough scale to lift the markets once more. With strong trends of this nature the buying and selling rarely turns off like a tap, instead if it turns it turns with the pace and grace of an oil tanker. We have seen heavy buying interest for the past few months and the recent minor sell-off is likely to appear as just too attractive an opportunity to miss for many of these buyers.

The longer term bearish arguments do continue to mount up: Inflation resurfacing, higher personal debt, slower GDP growth, inverted yield curve, sluggish personal spending, but so far these significant red flags have not been enough to dent the wider bullish sentiment.

As a result we maintain last week’s view that 5,200 remains on track. In order to turn negative, last week’s lows will need to be broken, and even then more evidence that the underlying economy was struggling would be needed to suggest that the longer term buying interest was finally running out of steam, else this could just be seen as yet another buying opportunity. Leaving a positive outlook for the index overall next week, with moves under 4950 needed to turn more negative.

Poolbeg Pharma has revealed a substantial year of progress in which the well-capitalised biopharmaceuticals company made strides forward in the development of key medicines.

Poolbeg is increasing its focus on rare and orphan diseases by leveraging POLB 001’s potential to treat cancer immunotherapy-induced Cytokine Release Syndrome (CRS). The rare and orphan drug market is expected to grow rapidly, reaching $368 billion by 2030, and Poolbeg is well-positioned to benefit from opportunities in this space given its leadership team’s expertise.

POLB 001 showed positive results in an influenza human challenge trial and potential as an oral preventative therapy for CRS in cancer immunotherapy, with a market potential over $10 billion. Poolbeg has also achieved promising in vivo animal data post year-end.

The company is effectively utilising AI through collaborations with CytoReason and OneThree Biotech, which have yielded valuable insights into influenza and RSV through the analysis of human challenge trial data.

Poolbeg also noted progression in the Oral GLP-1R agonist program by engaging key opinion leaders and working towards a clinical trial to demonstrate oral delivery, tapping into the projected $150 billion obesity and diabetes market by 2031.

Poolbeg has an enviable cash position with £12.2m on hand as of 31st December 2023.

“We made excellent progress and hit multiple key milestones in 2023, the most important of all perhaps was filing patent applications which will give us international protection over the use of POLB 001 as a preventative therapy for cancer immunotherapy-induced CRS, in addition to the existing severe influenza indication,” said Jeremy Skillington, PhD, Chief Executive Officer of Poolbeg Pharma.

“With a market opportunity exceeding US$10 billion in cancer immunotherapy-induced CRS, positive data generated, and a robust patent portfolio – POLB 001 has great potential to generate significant value for shareholders.”

On Tuesday, Poolbeg also announced an option to acquire a novel topical muco-adherent formulation of Pentoxifylline, a treatment for patient’s suffering from Behçet’s Disease from Silk Road Therapeutics Inc.

Investors were evidently encouraged by today’s updates and shares were trading 6% higher at the time of writing.

The underlying momentum at Whitbread is intact. Revenue was up 13 % in the 52 weeks to 29th February 2024 and underlying profit before tax jumped 36% to £561m.

The hotel business was Whitbread’s driver of record performance. UK accommodation sales grew 12%, helping margins increase to 21.2% and rapid expansion in Germany saw sales surge 62%.

“Whitbread’s served up a set of record beating results for the 12 months ending 29 February 2024. Premier Inn UK has continued to outperform the rest of the market and management are seizing the opportunity to convert 112 restaurants into 3,500 new room extensions. This appears to be a shrewd way to optimise the current real estate footprint and a capital efficient method to help reach the 2029 target of an estate of at least 97,000 rooms,” said Derren Nathan, head of equity research, Hargreaves Lansdown.

Spelling out where Whitbread sees its business going, the company is culling restaurant space in favour of rooms. Whitbread has a portfolio of tired restaurant brands that do not resonate with consumers as well as they used to. To avoid expensive rebranding and marketing activities, Whitbread has decided the best course of action is to convert the restaurants into rooms on a massive scale. 

Investors will be pleased to see another buyback and a 26% jump in the final dividend. While this is not reflected in today’s 0.5% gains in shares, Whitbread is entering a period where the food business may be a drag on earnings and require large amounts of capex to rectify. 

As highlighted by Nathan, there may also be nagging concerns about the valuation of the stock after such a good run which has acted as a counterweight to shareholder returns announced today. 

“Whitbread’s ongoing expansion and commitment to returning cash to shareholders has seen debt levels creep up but not to levels that are overly concerning,” Derren Nathan said.

“The Board’s indicated its confidence in its ability to further drive growth and expand margins with a generous dividend increase and renewed share buyback programme. The valuation has come under pressure of late largely due to wider concerns about the health of demand for hospitality. But Whitbread is a first-class operator that should be able to execute its medium-term goals and ride out any short-term turbulence.”

Innovative Eyewear has announced plans for a new stock and warrant offering the current market price. The company has entered into an agreement to issue and sell 4,200,822 new shares of its common stock at a price of $0.244 per share through a registered direct offering priced at the current market rate under Nasdaq rules.

Additionally, Innovative Eyewear will issue unregistered warrants to purchase up to 4,200,822 shares of common stock in a concurrent private placement. These warrants will have an exercise price of $0.244 per share.

The funds will be used to support Innovative Eyewear’s operations and growth initiatives in the smart eyewear market. The company has recently announced new distribution agreements and signed football pundit Micah Richards as brand ambassador as part of a global marketing push.

This raise is notable because it was completed at the current market price, demonstrating investor demand for the stock without having to offer a major discount.

The FTSE 100 started the week off on the front foot with more gains for London’s leading index as sentiment remained high after a better session in the US on Friday.

Investors will be delighted to see the FTSE 100 notch up another 0.4% gain, bringing the index within touching distance of 8,200 and another fresh record high.

“The FTSE 100 has clearly had its Ready Brek as the blue-chip index continues to glow and sustain energy that we haven’t seen in the UK market for a long time,” said Russ Mould, investment director at AJ Bell.

After a robust earnings week last week, better-than-feared US inflation data has helped maintain the upbeat mood with more earnings are expected this week. 

“Sentiment is upbeat at the start of the week, fuelled by relief that inflationary pressures in the US aren’t as bad as feared, and hopes return that a ceasefire could be negotiated in the Middle East. The FTSE 100 has scaled fresh heights, with another sprint higher in early trade. April has been a record-breaking month for the blue-chip index, with a glass-half full sentiment dominating,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“The Footsie has gained more than 11% over the last six months, with super-patient investors finally rewarded by this spurt of growth.”

Improving geopolitics is playing a part in Monday’s equity rally as tensions subside. 

“Investor optimism has been buoyed by a rally on US markets on Friday, and developments in the Middle East. Negotiators from Israel and Hamas expected to meet in Egypt, while US Secretary of State Antony Blinken ups diplomatic efforts at the World Economic Forum in Riyadh, Saudia Arabia,” Streeter said.

Anything positive from the Middle East is feeding directly into stocks currently because the risk premium built into oil is diminishing, which is easing inflation concerns. 

Monday’s gains were broad, with most industry sectors rising. Frasers Group was the best performer with a 2.5% gain.

Petrofac shares were down heavily on Monday after the energy EPC company said its shares would be suspended due to a delay in the publication of its annual report.

Petrofac shares were down around 24% after the company announced it was engaged with the FCA regarding a short delay in publishing the full-year 2023 results, which will now be published on 31st May 2024. Petrofac shares will be suspended from 1st May 2024.

Alongside the suspension notice, Petrofac announced a trading statement and update on financing, which did little to support Petrofac shares.

Petrofac has secured an additional $300m in financing from secure note holders as it pursues asset sales to improve its financial position.

In a trading statement issued on Monday, Petrofac said EBIT would be around $15m to $20m lower, but its financial performance for the year ending 31st December was otherwise broadly in line with what had already been announced.

“The Board and management are focused on arriving at a comprehensive refinancing solution as quickly as possible. We are encouraged by the engagement with the ad-hoc group of noteholders, which we hope demonstrates momentum in this complex process,” said René Médori, Chairman of Petrofac.