Helium One Global shares soared on Thursday after announcing upbeat results from its helium drilling campaign in Tanzania.

Helium One Global today provided an update on drilling operations at its Itumbula West-1 well in Tanzania, announcing it has encountered “elevated helium shows” at multiple target depths.

The well reached its target depth of 961 meters in basement rock on 24th January after passing through the Lake Beds Formation, Red Sandstone Group, Karoo Group and other targets. The company reported helium shows over 20 times above background levels while drilling through these zones.

Helium One Global shares were over 60% higher at the time of writing.

Helium readings increased in frequency and concentration in faulted zones encountered during drilling, likely due to the migration of deeply sourced fluids along the faults liberating the helium, Helium One said.

In addition to helium shows, the well also hit high concentrations of hydrogen in the Lake Beds Formation. Elevated hydrogen continued in the Karoo Group and basement.

Wireline logging operations are now underway for further evaluation. This will be followed by drill stem testing across the faulted zone and other zones of interest. Helium One said it remains excited by the initial results and will provide further updates once testing is completed.

Although today’s news has been taken well by the market, it may have come too late for some longer-term holders who have suffered multiple delays and dilutive placings that have eroded shareholder value.

CVS Group shares ticked higher on Thursday after the veterinary services group released rising revenue for the full year ended 31st December and said they expect to deliver full-year results in line with expectations.

The company posted strong revenue growth during the period, with total group revenue increasing 11.4% to £329.9 million compared to £296.3 million in the first half of 2023. On a like-for-like basis, CVS’ sales rose 6.0%, within the 4-8% target range outlined at the company’s Capital Markets Day in November 2022.

A key driver of CVS’ growth continues to be membership in its Healthy Pet Club preventative care program, which reached 500,000 members as of 31 December 2023, up 4.0% from 489,000 members as of 30th June 2023.

The company’s adjusted EBITDA margin held steady at approximately 19%, as a slight improvement in gross margin was offset by increased utilities and other costs, as well as continued investment in support functions.

“CVS continues to be buoyed by an explosion in pet ownership in the UK. The vet-care specialist has seen another round of double digit revenue growth in the first half, and robust like-for-like growth. The group’s mindful of the tough economic backdrop, but has reaffirmed it’s on track to hit full year expectations,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.

“One of CVS Group’s main strengths is that spending on our pets is an area that we won’t cut back on unless absolutely necessary. That doesn’t make the group immune to a tightening of purse strings, but it does make it more resilient than the average business.”

CVS invested £17.2 million in practice refurbishments, relocations, new equipment and technology during the first half, in line with its target of £30-50 million in capital expenditures per year.

The company remained active on the acquisition front, completing 4 additional acquisitions of small animal veterinary practices in Australia, bringing the total to 13 acquisitions and 15 sites in the first half of 2024. The aggregate initial consideration for these deals was A$103.8 million (£54.6 million).

CVS Group shares were 1.4% higher on Thursday, but the stock still remains well below 52-week highs after the UK’s CMA announced a review into the veterinary market’s practises.

“The cloud of the Competition and Markets Authority’s investigation into the veterinary sector is still lingering. Outcomes are due early this year, and this will be the main driver of sentiment in the short term. Issues surrounding branding when CVS acquires a local practice, as well as pricing transparency are two of the main issues at play. Despite the added pressure this brings, the shares have arguably been oversold in response to the investigation,” Lund-Yates said.

Record highs in US stocks do wonders for investor sentiment, as was the case on Wednesday after another strong session across the pond helped lift European stocks.

Upbeat earnings from Netflix raised hopes tech stocks could provide a catalyst for another leg higher in global equities. At the same time, reports of possible Chinese stimulus sent the FTSE 100’s China-focused stocks sharply higher.

“The FTSE 100 got off to a strong start on Wednesday as US stocks continued to test new records with earnings season getting underway in earnest,” said AJ Bell investment director Russ Mould.

“Reported plans for a big intervention to help restore investor confidence in China helped lift shares with ties to emerging markets including insurer Prudential, banking outfit Standard Chartered and miners.”

The FTSE 100 was 0.3% higher at the time of writing in range-bound trade.

One eye on the UK economy

London’s leading index wobbled briefly earlier in the session following the release of upbeat UK services. Better than expected UK Services PMI data sent the pound higher against the dollar as the all-important service industry showed signs of expansion. Notably, employment in the sector was robust, supporting a healthy picture of the UK economy.

While this is excellent news for the economy, it’s not necessarily good news for stocks.

A rising pound tends to cap gains for the overseas-weighted FTSE 100, and a strong services sector reduces the need for the Bank of England to cut interest rates in the near term to support activity.

Trade on Wednesday represents the gyrations investors should become accustomed to in the coming months as anticipation around the first interest rate cut builds.

FTSE 100 movers

Reports of Chinese stimulus helped propel the miners higher on Wednesday, with the sector dominating the top risers. Fresnillo stormed nearly 6% higher and was the top gainer, closely followed by Endeavour Mining.

Copper miner Antofagasta was in demand as shares rose over 5%. Diversified miners Anglo American and Glencore gained between 2.6% and 3.3%.

Companies with strong ties to China, such as Burberry and Prudential, also showed well on Wednesday.

The risk-on trade was demonstrated by weakness in defensive names such as pharma groups Haleon and GSK.

On Wednesday, Tekcapital provided further evidence that MicroSalt is on the verge of listing in what could be the first AIM IPO of 2024.

The technology investment company said it had disposed of shares in another portfolio company, Belluscura, for the sole purpose of contributing towards MicroSalt’s admission to AIM.

MicroSalt has developed salt technology that lowers sodium intake without sacrificing taste. Millions of people globally die prematurely due to cardiovascular diseases exacerbated by the overconsumption of sodium.

Governments and large food corporations are waking up to the health implications of high-sodium intake and MicroSalt is well-positioned to drive the reduction in consumption.

In 2023, the company recorded a significant year of commercial progress for both its salt shakers and B2B business, including deals with two Fortune 500 companies.

According to the admission document released last year, MicroSalt has established a commercial relationship with one of the world’s largest snack food businesses, and Tekcapital further confirmed substantial orders of bulk low-sodium salt in its annual corporate review.

An updated Schedule One form submitted to the London Stock Exchange in December indicated MicroSalt would list in late January. Given the company has not advised otherwise, the listing could be a matter of days away.

Demand for cheap pints gathered momentum over the festive period with Wetherspoon’s bars enjoying increased like-for-like sales ahead of industry benchmarks.

In the 25 weeks to 21st January 2024, like-for-like sales rose 10.1% versus the same period last year. Bar sales were up 11.8%, with food up 7.9%. Total sales grew 8.4% year-to-date.

Recent trading showed no let-up, with like-for-like sales jumping 11.1% in the last 12 weeks. Wetherspoon continued to outperform the broader pub and restaurant sector, with its December like-for-like growth of 15.2% well ahead of the industry average of 8.8%. This marks 16 straight months of outperformance for Wetherspoon.

The company did see some moderation in the last 3 weeks, with like-for-like sales up 5.8%, but the underlying momentum remains strongly positive heading into the key spring and summer trading periods.

“It’s fair to say that even a cost of living crisis has not dulled the British appetite for a pint at the pub, especially when the pints are going cheap. Wetherspoons’ jump in sales versus last year illustrates that small luxuries will still be afforded within people’s budgets, even when money is tighter than usual,” said Adam Vettese, analyst at eToro.

“The pub group has always been centred on value and this is in focus more than ever, albeit with inflation weighing on input costs in recent times. This value focus will have helped the business to carefully balance costs over the last year and with pressures likely to ease up in the months ahead and with rate cuts coming in, Wetherspoons is very well placed to kick on.”

After a rip-roaring rally in JD Wetherspoons shares from the October in which the stock has gained by third, today’s trading update was the signal for some investors to book profits.

JD Wetherspoons shares were down by 1.5% at the time of writing.

“With the shares up some 75% over the last year and a valuation multiple of about 20x forward earnings, there’s certainly pressure to keep serving up impressive results,” said Derren Nathan, head of equity research at Hargreaves Lansdown.

easyjet shares were higher on Wednesday after the airline announced strong momentum going into the summer months and strength in the first quarter.

easyJet’s first quarter results showed improving underlying performance, despite conflict in the Middle East temporarily impacting operations.

The airline expects to reduce seasonal losses in the first half of 2024 versus last year, absorbing a £40 million impact from the conflict. easyJet holidays saw a 48% jump in customers.

easyjet shares were 5% higher at the time of writing on Wednesday.

The key passengers growth metric increased by 14% as loss before tax for the first quarter reduced to £126m from £133m in the last year. With profits almost exclusively weighted to summer months, airlines are expected to recorded losses over the winter.

Bookings indicate a positive summer ahead, with early trends showing increased volume and pricing year-on-year. easyJet expects second half revenue per seat to remain well ahead of 2023 levels, with higher loads and yields in Q3 and Q4. Cost control initiatives aim to deliver flat unit costs, excluding fuel.

The holidays business anticipates over 35% more customers this financial year. While the Middle East conflict caused short-term disruption, easyJet enters peak summer with strengthening demand and momentum.

“Geopolitical conflict can spook many industries, especially airlines. Broader softness was seen at the outbreak of the Middle East conflict in October, and easyJet is counting the lost pennies from paused flights to the tune of £40m. Shutting down routes is a very expensive undertaking and it’s unclear when things will normalise,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“Looking further into the year, summer bookings look robust, in a sign that travel remains a priority for consumers. There is some uncertainty about how long these trends can hold though.

“Investors will be more concerned about the group’s ability to maintain the newly reinstated dividend. At this stage it seems unlikely easyJet will scrap its plans to increase the payout to 20% of post-tax profits this year, but that will depend on the resilience of forward bookings.”