Ten Entertainment Group (LON: TEG) is the biggest riser on the London market after it agreed a 412.5p/share cash bid from Neon Buyer, which is owned by funds advised by Trive Capital Partners.
The bid is one-third higher than the previous day’s closing price. It values the ten-pin bowling sites operator at £287m. The takeover should complete in the first quarter of 2023. Net debt of around £196m is forecast for the end of 2023.
Trading is in line with expectations. The board says that the current economic and political uncertainty was a factor in recommending the bid. It also believes that the market was not reflecting the value of the business, which was trading on a lower rating than its peers.
The bidder plans to retain the management team and believes that it can help to accelerate growth through providing additional capital.
Consensus forecasts suggest a 2023 pre-tax profit of £28.6m, rising to £31.3m next year. The bid values Ten Entertainment Group at 13 times 2023 estimated earnings. The share price has never reached the bid level, with the previous high being 334.5p at the beginning of 2020.
Oil and gas producer Wentworth Resources (LON: WEN) is hopeful that the 32.5p/share bid by Maurel & Prom could go ahead by 21 December. That could prove optimistic. The bidder is in talks with the Tanzanian authorities to gain the approvals required to complete the acquisition. The share price moved back up 25.8% to 30.5p.
Ilika (LON: IKA) says that its Goliath electric vehicle battery has reached lithium-ion energy density parity with existing pouch cells. This justifies the investment in a full pilot facility. Goliath is safer, charges faster and lasts longer. The share price jumped 22.6% to 51.5p.
Marketing research provider System1 Group (LON: SYS1) bounced back by one-fifth to 210p after reporting a 27% increase in interim revenues to £13.3m, even though consultancy revenues fell. There was strong growth in the US and overall margins are improving. There was a fivefold increase in pre-tax profit to £1m. Canaccord Genuity has increased its full year pre-tax profit forecast from £3m to £3.2m.
Fuels developer Quadrise (LON: QED) has announced further test results for its bioSMAR, which show significant advantages over diesel. bioMSAR blends with up to 40% crude sugar oil cut emissions by more than 30% and improves energy efficiency by up to 7%. Other formulations containing waste-based methyl-esters reduces CO2 emissions by more than 45%. The tests were performed on a 40kw Cummins engine at Aquafuel Research’s site. Tests on a larger engine are planned. The share price improved a further 19.8% to 51.5p, which is more than double the level one week ago.
FALLERS
Gunsynd (LON: GUN) announced a fundraising yesterday evening. The investment company raised £210,000 at 0.2p/share. This will provide additional cash for investments and fund the running of the company. The share price fell 18% to 0.205p.
Tintra (LON: TNT) has sent out the circular to gain shareholder approval for cancelling the AIM quotation. Allenby has resigned as nominated adviser and broker and trading in the shares was suspended at 11am. The quotation will end on 6 January if a new nominated adviser is not appointed, which is unlikely. The share price slipped a further 13.3% to 32.5p before trading was suspended.
Scirocco Energy (LON: SCIR) says that it expects to receive a second payment of £108,000 for its stake in Corallian Energy following its sale to Shell. Another payment is due following development approvals of the core oil and gas project being received from Shell from the North Sea authorities. Even so, the share price dipped 8.33% to 0.275p.
Tidal energy company SIMEC Atlantis Energy (LON: SAE) is selling freehold land in Uskmouth to FPC Electric for £9.8m. That will bring in much needed cash. The site will be used for the first battery energy storage system at the Uskmouth Sustainable Energy Park. Payments will be in tranches between 2024 and 2025. Further battery storage projects are being developed. There is progress with the MeyGen tidal energy project. The Abundance bonds are being extended to 2029, subject to a bondholder vote. The share price declined 7.69% to 1.2p.
The FTSE 100 was trading with a positive tone on Wednesday after a solid Asian session helped European stocks open higher, and investors await vital jobs data from the US.
The FTSE 100 was 0.45% higher at the time of writing and is 1.4% higher over the past five trading sessions.
Optimism around interest rates is starting to grow, but one would caution this could quickly unwind on adverse US Non-Farm Payrolls due to be released on Friday.
“The FTSE 100 moved higher on Wednesday as it responded to positive trading in Asia,” said AJ Bell investment director Russ Mould.
“Cooling job vacancy data from the US helped bolster expectations that we are at the pivot point of this rate hiking cycle – though more news on the US labour market through the course of this week will provide a fuller picture.”
Miners have recently been at the forefront of the FTSE 100’s moves. The trend continued on Wednesday after upbeat comments by Rio Tinto’s CEO.
“Miners were in demand as Rio Tinto CEO Jakob Stausholm briefed investors that Chinese steel mills were ‘producing flat out’. This is good news for iron ore producers like Rio, with the patchy recovery in China a big reason why the mining sector has had a difficult time in 2023,” Mould said.
“Rio also announced big spending plans. Along with signs of burgeoning M&A elsewhere in the sector, any excitement felt by investors at the growth potential may be tempered by concerns the industry is losing some of the discipline it has demonstrated in recent years.”
Rio Tinto gained 1.75%, Anglo American rose 1.7%, and Glencore added 1.45%.
Prudential was the top riser, gaining 3.2%, as the mood around China and Asia improved.
British American Tobacco
British American Tobacco was the top faller after revenue growth came in at the lower end of expectations as the company struggled to contend with lower smoking rates and a transition to vapes and other new categories.
“Despite weak demand from smokers in the important US market it’s managed to eek out a year of revenue growth albeit at the lower end of previous guidance,” said Derren Nathan, head of equity research at Hargreaves Lansdown.
“Meanwhile the rollout of new categories such as vapes, heated tobacco and oral pouches is continuing apace with breakeven now expected in the current period, two years ahead of the original plan.
“Management now sees these products as the cornerstone of the company’s future expecting them to deliver half of group revenues by 2035. But that’s a long way off. Non-combustible products should contribute to the bottom line in 2024 but beyond that the long-term outlook for margins is still unclear.”
British American Tobacco shares were down 7% at the time of writing.
The UK Investor Magazine met with the Royal Mint to explore the demand dynamics for gold and the factors at play driving gold to record highs.
Gold has recently traded at record highs around $2,140 per ounce as the promise of easier monetary policy drove prices higher.
Over the past two years, financial markets experienced a significant shift when the Federal Reserve, along with central banks globally, raised interest rates to the highest levels in over two decades in response to mounting worries about surging inflation.
“Gold is an inherent store of value,” said Precious Metals division director at the Royal Mint Andrew Dickey to UK Investor Magazine.
08.07.21 Royal Mint
Gold Safe Haven Status
Macroeconomic instability, concerns about inflation, and ongoing wars in the Middle East and Ukraine have seen gold prices above $2,000 four times in the last six months.
“It has always been seen by investors as a safe haven and a hedge against macroeconomic instability,” Andrew Dickey added.
Gold, silver, and platinum have all fluctuated this year. Andrew Dickey explained that this volatility is what brings customers and investors in.
Gold price rallied substantially during the pandemic and has largely held its value since. The “appetite and demand for Bouillon investment have really continued,” Dickey explained.
The Royal Mint has experienced growing demand for its collection of coins, bars and recently launched digital gold.
A diverse group of investors
The Royal Mint sees gold as increasingly appealing to a diverse group of investors. More specifically, for example, the Royal Mint has attracted the highest number of millennial investors than ever before.
The popularity of fractional coinage and digital range has been a driver of the Royal Mint’s welcoming of new customers and investors.
Fractional coinage and Digi gold, silver, and platinum products allow investors to invest amounts from £25.00 in digital fractional gold, silver or platinum coins.
The Royal Mint has experienced a record-breaking number of young and beginner investors, as the ability to invest smaller amounts into silver, platinum, and gold is what later makes investing in high-value gold more accessible.
Through Digi Gold, Platinum, and Silver, investors can now buy fractional coinage that is stored at the Royal Mint‘s vaults in the form of 400-ounce gold bars.
Smaller physical bars have also helped welcome younger to gold investment.
“The average age of investors has dropped since the introduction of smaller bars,” said Andrew Dickey.
What is also important to stress is that, according to Andrew Dickey, as recently as 5 years ago, “only 7% of our customers were women; now the number is up 20%,” he said. This is generally due to the fact that gold has become more affordable for everyone. More parents can now open a savings account for their children at the Royal Mint and invest as little as £25 a month.”
Further, “recirculation of coins through the secondary market” has also been helping the market; these coins are able to “hold up their value pretty well,” said Andrew Dickey.
Since the death of Queen Elizabeth, Andrew Dickey explained, the Mint has seen a sharp rise in people reselling Britannica coins with the Queen’s effigy on them. The 2024 King Charles’s effigy coins are no less popular now.
Rio Tinto has issued a progress update on its core mining operations, including Pilbara iron ore and the Oyu Tolgoi copper mine.
The FTSE 100 mining giant said it plans to increase iron ore capacity to 345 to 360 million tonnes at its Pilbara operation and ramp copper production at Oyu Tolgoi to 500kt per year.
The increase in production at Oyu Tolgoi will make it the world’s fourth-largest copper mine.
“The performance at our Pilbara iron ore and Oyu Tolgoi copper operations shows our path towards becoming best operator, and we are focussed on driving continuous improvement across our global portfolio,” said Rio Tinto Chief Executive Jakob Stausholm.
It further plans to make a substantial investment in the Simandou iron ore project in Guinea, allocating approximately $6.2 billion for the development, including the necessary port and railway infrastructure for raw material exports.
Rio Tinto holds the rights for the development of the southern half of the deposit in collaboration with the government of Guinea and a Chinese consortium led by the Aluminium Corp. of China. The group is expected to invest a total of $11.6 billion.
The Simandou Mountains host one of the world’s largest untapped iron ore deposits, challenging the current dominance of the market by exports from Brazil and Australia.
The Winning Consortium Simandou, led by the Winning International Group and the China Hongqiao Group, holds the rights for the development of the northern part, also in collaboration with the government.
This consumer stock is doing everything a growth investor should look for. Sales and margins are growing, and the bottom line has benefited in the last half-year period.
Maintaining and growing margins in the current inflationary environment is a big ask. Yet, this company has done just that and is amassing a substantial cash pile.
The company has the means to invest directly in future growth or even start to pay dividends.
The company has a loyal customer base and a steadily growing market share in the UK. They seek to replicate their success in the UK by expanding into Europe.
A major attr...
Semiconductors developer CML Microsystems (LON: CML) published interims that show modest growth in revenues and flat profit after acquisition costs. The share price has fallen by one-quarter so far this year, but the balance sheet is strong, and the business is outperforming its markets. These addressable markets are worth more than $1bn.
CML Microsystems is focused on the wireless communications market. The newer SuRF product range operates at microwave and millimetre-wave frequencies that enable high data rates. They are based on high-performance compound semiconductors and broaden the marke...
The FTSE 100 declined on Tuesday as markets braced for US economic data with the potential to shift expectations of when the Federal Reserve will first cut rates.
A weak session in US stocks overnight spilt over into the European session, with the FTSE 100 trading down 0.7% at the time of writing.
“The FTSE 100 slipped at the open after weakness on Wall Street last night. The markets are a touch nervous ahead of US jobs figures this week which could either reinforce or undermine the narrative that interest rates have peaked and rate cuts are on the way,” said AJ Bell investment director Russ Mould.
“Signs the labour market is heating up again would put any hopes of a Santa rally into the end of the year under threat.”
After the Federal Reserve suggested they were done with rate hikes at their last meeting, investors have quickly priced in interest rate cuts as early as March next year. This positioning sent US stocks sharply higher.
Friday’s Non-Farm Payrolls will set the tone for trade going into the end of the year. Before then, markets will digest other measures of the US employment market, including ADP jobs data and JOLTS.
China outlook
The FTSE 100 was again hit by developments in the Chinese economy on Tuesday. Credit rating agency Moodys cut China’s outlook to negative, sending waves through Asian stocks and the FTSE 100’s China-focused stocks.
Anglo American was one the biggest fallers for a second straight session, down 3.3%. Antofagasta slid 2%.
Ashtead was at the bottom of the leaderboard after profit flatlined in the second quarter, despite the plant hire company achieving record sales.
“Equipment rental business Ashtead has an enviable track record of earnings and dividend growth going back more than a decade and it has posted record results yet again today,” said Russ Mould.
“The catch is that earnings were flat in the second quarter, underlining why the company recently moved to warn on profit. Some of the reasons for this warning – notably the writers’ strike which affected demand on film and TV sets – seemed genuinely one-off in nature but there will be concerns about how robust America’s construction and infrastructure markets are right now.”
Ashtead shares were down 3.7%.
Barclays was also among the fallers on the news Qatar was mulling the sale of half of their holdings in the bank.
BT was the top gainer after JP Morgan analysts increased their price target to 290p from 280p. BT traded at 128p on Tuesday.
Cancer treatments developer ValiRx (LON: VAL) has entered into an exclusive option agreement to licence VAL401 with Ambrose Healthcare. The option lasts for 12-months. A fee in the form of Ambrose Healthcare shares has been paid and there are milestone payments of up to £16m plus royalties. The share price jumped 24.1% to 12.25p.
Condor Gold (LON: CNR) says it has five non-binding offers for the La India gold project in Nicaragua. There are advanced discussions with two gold producers. The exercising of warrants has raised £1m at 15p/share and Galloway Ltd, which is controlled by Condor Gold chairman Jim Mellon, owns 25.6%. A placing at the same share price is possible. The share price improved 8.9% to 15.25p.
Shares in payments services provider Cornerstone FS (LON: CSFS) continues to rise after yesterday’s positive trading statement. The share price rose 6.45% to 16.5p. The full year pre-tax profit forecast has been upgraded from £100,000 to £700,000.
Reabold Resources (LON: RBD) is set to receive £5.2m as the second tranche of the payment from Shell for the Victory gas field. This cash can be reinvested in other oil and gas projects in the UK and Italy. The West Newton B-2 well in the North Sea will be drilled in the first half of 2024. The share price increased 4.44% to 0.1175p.
FALLERS
Video games company tinyBuild (LON: TBLD) says current trading is below expectations and full year revenues will be between $40m and $50m – a large spread for such a late point in the year. A claim from the vendors of a past acquisition has been settled for $3.5m plus costs. At the end of November, there was cash of $5.7m, which will be lower at the end of the year. There is no debt, but new funding will be required in January. Chief executive Alex Nichiporchik says he will underwrite a fundraising of up to $10m. Other shareholders will be given the opportunity to participate. The share price dived 33.1% to 4.1p. The March 2021 placing price was 169p.
Helium One Global (LON: HE1) says it requires further funding for the Tai-3 well at Itumbula in Tanzania, which should be spudded in early January when the drilling rig has been repaired. Management is in discussions with potential investors and assessing other options. The share price slumped 27.1% to 2.15p.
Ethernity Networks (LON: ENET) says full year revenues were between $3.6m to $3.8m and the loss will be lower than in 2022. Monthly operating expenses have been reduced to $300,000. There is $954,000 in the bank, including a loan from the chief executive. Management believes that the company can exit the temporary suspension of proceedings process. The share price fell 18.8% to 1.625p.
Chaarat Gold Holdings (LON: CGH) is raising £1.1m at 5.25p/share and converting a £700,000 working capital facility into shares at the same price. This will help to complete the financing of the Tulkubash gold project. An investment of $104m is required to construct the project. The share price dipped 20.7% to 5.75p.
Clothing retailer Quiz (LON: QUIZ) moved back into loss in the six months to September 2023. Net cash fell to £3.6m and it has further reduced to £900,000. Revenues were 14% lower at £42.3m with the biggest fall in online revenues. Sales continue to decline, and full year revenues could be up to 8% lower than expectations. A strategic review should be complete in the first quarter of 2024. The share price decreased 13.6% to 6.025p.
After a rip-roaring rally to fresh record highs, gold price slipped back on Tuesday to trade at $2,206.
The prospect of an end to the tightening cycle – and even rate cuts – has fuelled a rally in the precious metal.
Recent statements from Fed Chair Jay Powell hint at US monetary policy being “well into restrictive territory,” fueling speculation that the Fed might initiate interest rate cuts in early 2024.
Earlier this week, spot gold prices surged to new highs at US$2,140 per ounce amid growing anticipation of a shift towards looser monetary policy in the United States, though much of these gains were later retraced.
Other crucial precious metals, namely silver, platinum, and palladium, all experienced a similar trend in November–beginning of December (though platinum and palladium generally tend to experience less intense spikes).
According to analysts, the upward trend in the precious metals market will continue with a backdrop of potentially easier monetary policy.
Gold, specifically the most popular one of all, has made a series of record high 2020–23. And macroeconomic instability is to blame.
There are wars raging in some parts of the world heighten demand for safe havens.
But “gold is an inherent store of value,” said Precious Metals division director at the Royal Mint Andrew Dickey to UK Investor Magazine. “It has always been seen by investors as a safe haven and a hedge against macroeconomic instability”, he added.
