AIM movers: Bidstack reaches €3m settlement and Bermuda authorities ask for review at R&Q Insurance

Andrew Hore
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6
AIM movers: Bidstack reaches €3m settlement and Bermuda authorities ask for review at R&Q Insurance

The Bidstack (LON: BIDS) share price has doubled to 0.65p and it was higher earlier in the day. The in-game advertising technology provider has reached a settlement with Azerion, which will pay €3m. The two parties will form a new non-exclusive commercial partnership in 2024.

Webis (LON: WEB) US subsidiary WatchandWager.com has renewed an agreement with Monarch Content Management to accept wagers on all the latter’s 15 racetracks in 2024. The company has also renewed its regulatory licences. The share price is 30% ahead at 1.3p.

Georgia-focused oil and gas producer Block Energy (LON: BLOE) is ready to farm-out the project III asset of multi-TCF undeveloped gas resource. This could have a material impact on NAV. Current production should generate the cash required to fund its strategy. Management will stop publishing quarterly reports. The share price increased 12.1% to 0.925p.

Vela Technologies (LON: VELA) says that Conduit Pharmaceuticals published a prospectus on 15 December and since then it has been able to sell shares received via the AZD 1656 put option. Vela Technologies received just over one million Conduit Pharmaceuticals shares. There was £31,000 in cash at the end of September 2023. NAV was £7.5m, compared with a market capitalisation of £3.7m at 0.0255p, up 10.9%.  

FALLERS

The Bermuda Monetary Authority has asked R&Q Insurance Holdings (LON: RQIH) to provide an independent actuarial review of the required reserves, capital and cash flow projections following the planned disposal of the Accredited business. Any new external transactions will have to be put on hold and is not allowed to redeem $20m in subordinated notes until after the review. The share price slumped 21.9% to a new low of 8.59p.

European Metals Holdings (LON: EMH) says that the definitive feasibility study for the Cinovec lithium project in the Czech Republic has been delayed until the first quarter of 2024. This will allow time to complete capital and operating cost estimation and project implementation scheduling. The share price slipped 18.8% to 20.5p.

Cleantech company Verditek (LON: VDTK) has adjourned the general meeting to increase the authority to allot shares. There have been discussions with shareholders concerning the way to finance the business. The share price is 7.89% lower at 0.175p.

Tungsten West (LON: TUN) had cash of £1.4m at the end of September 2023. Plant upgrade projects at the Hemerdon mine in southwest England will recommence after the outcome of the permit application and financing has been obtained. Interim revenues increased from £208,000 to £722,000 as tungsten was produced from legacy materials. The loss increased from £5.13m to £9.13m. The share price fell 7.69% to 1.2p.

Tip update: Hargreaves Services increasing dividend despite German slowdown

Andrew Hore
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2
Tip update: Hargreaves Services increasing dividend despite German slowdown

Trading has not gone to plan but Hargreaves Services (LON: HSP) is able to offer an enhanced dividend pay out. The pre-tax profit forecast for the year to May 2023 has been slashed, but the shares remain modestly rated and the yield is more than 8%.
The core services operations are doing better than expected, thanks to HS2 demand, and the land division is likely to make the anticipated contribution. Reduced commodity prices and a slowdown in the German economy have hit the performance of German associate company HRMS, which is expected to make a first half loss. It should make a full year prof...

AIM movers: tinyBuild secures cash and ex-dividends

Andrew Hore
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0
AIM movers: tinyBuild secures cash and ex-dividends

Video games publisher tinyBuild (LON: TBLD) has secured the cash it requires for working capital. The fundraising includes a one-for-six open offer and should raise $14m at 5p/share. The share price recovered 50% to 3.75p. Interactive entertainment company Atari is investing $2m. Chief executive Alex Nichiporchik will underwrite up to $10m of the fundraising. The video games market continues to deteriorate. Full year revenues are likely to be between $40m and $50m with a greater than expected proportion of lower margin games. Cost cutting should reduce cash outflow by up to $10m/year.  

Financial Website operator ADVFN (LON: AFN) was hit by a tough retail environment. Revenues declined and the loss increased despite a reduction in costs. Management believes that investing in a new app and other parts of the product offering will help it to recover. The plan is to increase income via traffic growth. Hosting and IT expenses can be reduced further. There is £5.6m in the bank. The share price bounced back 43.5% to 16.5p.

GlobalData (LON: DATA) has agreed the sale of a 40% stake in its healthcare division to Inflexion and it expects to receive from £434m the deal. This moves GlobalData into net cash, which will finance acquisitions, and points out the undervaluation of the group. Singer has increased its target price from 178p/share to 231p/share. The share price improved 19.4% to 191p.

Europa Oil & Gas (LON: EOG) is spending $3m on a 42.9% interest in Antler Global, which owns 80% of the EG-08 exploration licence, offshore Equatorial Guinea. The cash invested will fund acquisition of 3D seismic data. A partner will be brought in for drilling. The share price is 10% higher at 1.1p.

FALLERS

Helium One Global (LON: HE1) announced a placing raising £6.1m at 0.25p/share. The share price has fallen by two-thirds to 0.2425p. This will fund the drilling of the Itumbula West-A well starting in early January.

Scirocco Energy (LON: SCIR) is selling its interest in Energy Acquisitions Group for an enterprise value of £2.6m, plus up to £150,000 in contingent consideration depending on acquisition of anaerobic digestion sites, to OrbeNovo Sponsor. The business requires significant investment, which would be difficult to raise. This is conditional on shareholder approval. The board is reviewing options. The share price fell 18.2% to 0.225p.

Oil and gas producer Caspian Sunrise (LON: CASP) says current production is steady at 2,000 barrels/day. The interval tested at Well 142 was not commercial. Further drilling is being undertaken. Realisable prices in Kazakhstan are much lower than international prices. The share price decreased by 12.7% to 2.4p.

SRT Marine Systems (LON: SRT) is raising £10m at 35p/share with up to £500,000 more to come from a retail offer. This includes a £7m investment by Ocean Infinity. There were no revenues from systems in the first half, but they should make a significant contribution as work on contracts reaches points where it can be invoiced. Earlier this year, SRT raised £5.36m from a placing and Primary Bid offer at 50p/share. The share price is 8.43% lower at 38p.

Ex-dividends

Aeorema Communications (LON: AEO) is paying a dividend of 3p/share and the share price fell 10p to 97.5p.

CML Microsystem (LON: CML) is paying an interim dividend of 5p/share and the share price declined 1p to 374p.

MS International (LON: MSI) is paying an interim dividend of 3p/share and the share price increased 15p to 880p.

PHSC (LON: PHSC) is paying an interim dividend of 0.75p/share and the share price declined 1.5p to 23p.

Real Estate Investors (LON: RLE) is paying a dividend of 0.63p/share and the share price is unchanged at 29.25p.

Legal & General shares: why 2024 will be rewarding for investors

UK Investor Magazine
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6
Legal & General shares: why 2024 will be rewarding for investors

Legal & General shares have the potential to help investors achieve their investment goals in 2024.

The FTSE 100 stalwart has shaken off the worst of the macroeconomic concerns, and the Legal & General share price is around 25% higher than the worst levels of 2023.

With the shares now trading in the vicinity of 52-week highs, investors will question whether it has the momentum to break through 260p – 270p and attack 300p in 2024.

There is a weight of supporting factors that suggest it will.

Legal & General trades at 6.7x historical earnings. No matter what happens to earnings in the next year, this is cheap and underscores the opportunities in the shares. At a 6.7x multiple, Legal & General shares have a long way to go before they trade back in line with historical averages.

Apart from 2020 and 2022, Legal & General’s historical PE Ratio has averaged above 10 on an annual basis every year since the financial crisis.

Although one may want to hold off jumping straight into Legal & General shares at the current price or set out a dollar-cost averaging strategy, the capital appreciation element of Legal & General shares in 2024 is compelling.

Despite a rip-roaring rally through Q4 2023, Legal & General shares still yield 7.7%. The dividend is well covered at 1.9x, and the company is committed to a progressive dividend policy. One would expect the dividend to increase in 2024.

Improving macroeconomic environment

It is not that the economy is entirely out of the woods that supports Legal & General’s investment case, but more that there is light at the end of the tunnel. Investors can see a clear path to a more favourable macro environment.

Inflation rates are falling globally, and interest rates will not be too far behind. Lower interest rates will boost financial conditions and support Legal & General’s top and bottom lines.

The doomed mini-budget in 2022 that rocked Legal & General’s fixed-income activities is now a distant memory, and the shares deserve a rerate.

AIM movers: Angus Energy financing and Versarien disposals delayed

Andrew Hore
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4
AIM movers: Angus Energy financing and Versarien disposals delayed

Angus Energy (LON: ANGS) has agreed a £20m debt facility with Trafigura to refinance existing debt and finance investment in the Saltfleetby field. The interest margin over SONIA is 8%, which is lower than before. The deal also replaces a hedge contract with a fixed price offtake agreement with Trafigura. The financing has pushed up the share price 21.1% from its recent low to 0.575p.

Pharmacogenetic testing company Genedrive (LON: GDR) has received initial orders from Europe and the Middle East for the Genedrive MT-RNR1 antibiotic induced hearing loss testing products. The initial orders from distributors will be used for promotion and evaluation. The share price improved 17.5% to 9.4p.

Filtronic (LON: FTC) has gained a new contract for the second day running. This is a £4.8m contract for LEO satellite communications equipment. This is a follow-on contract for second generation Cerus32 solid state power amplifier modules for ground stations. This shows the increasing importance of the satellite market.  The share price rose a further 9.52% to 23p.

FALLERS

Graphene technology developer Versarien (LON: VRS) has found it difficult to complete the disposal of non-core assets. In the year to September 2023, revenues were £5.45m and cash fell to £600,000. There was £450,000 raised since then, but cash has fallen to £420,000. A general meeting will be held to gain shareholder approval for a reduction in share capital and nominal value to make it easier to raise money from share issues. The share price slumped 42.2% to 0.18p.

Bluejay Mining (LON: JAY) has appointed Roderick McIllree, Harry Ansell and Troy Whitaker to the board with the latter becoming chief operating officer. Robert Edwards, Bo Stensgaard and Peter Waugh have stepped down from the board. Roderick McIllree was previously chief executive between 2015 and 2022. The strategy is to focus on the Disko magmatic massive sulphide project in Greenland. The share price declined 18% to 0.5p.

Ironveld (LON: IRON) achieved initial production at its Rustenburg smelter, but operational problems delayed the anticipated ramp up. In the year to June 2023, revenues were modest and there was a cash outflow from operations and investing of £5.6m. A funding transaction is imminent. The share price slipped 18.8% to 0.175p.

GCM Resources (LON: GCM) is still waiting to receive a further drawdown of £300,000 on the Polo Resources loan facility. The cash is required before the end of the year. The share price fell 5.88% to 1.6p.

Arkle Resources (LON: ARK) has completed drilling at the Inishowen gold prospect in Donegal. Vein bearing structures were identified in all four holes. This will enable further drilling to be undertaken. Earlier in the day, the share price rose, but it has fallen back 5.26% to 0.45p.

Helium One shares capitulate after a catastrophic year for investors

UK Investor Magazine
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4
Helium One shares capitulate after a catastrophic year for investors

Helium One Global shares were down a further 16% on Wednesday as investors continued to dump the stock. The Helium One share price has lost 74% of its value so far in December alone. The stock is down 89% year-to-date.

The company sent investors running for the hills after signalling in early December that it required additional funds to make any further progress in its drill campaign.

The funding surprise came after a year of difficulties securing a rig, poor drilling results and little progress.

“Having completed the costing exercise, the Company has identified a need for additional funds before Itumbula can be drilled,” Helium One said in a statement.

“The Company is advancing discussions with potential investors while also assessing other financing options and is confident of securing additional funding in the near future,” commented Lorna Blaisse, Chief Executive Officer of Helium One.

The CEO said this on 5th December, and investors have not heard anything since.

It is an awfully difficult market to raise funds in. Investors, clearly predicting unfavourable terms of any financing package, have decided to jump ship.

This will make life even more difficult for Helium One, which now has a market cap of just £8.6m.

Housebuilding shares jump as UK inflation falls

UK Investor Magazine
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Housebuilding shares jump as UK inflation falls

Housebuilding shares were higher on Wednesday after UK inflation fell to 3.9% in November. The news was welcomed by investors in interest rate sensitive sectors, including housebuilders and retailers.

“Inflation data brings good tidings. In the aftermath of this year’s economic downturn marked by sluggishness and lacklustre performance, the latest inflation figures bring a glimmer of hope to UK businesses, setting the stage for a more optimistic and merry start to 2024,” said Douglas Grant, Group CEO of Manx Financial Group.

The data suggests the Bank of England will cut rates early next year. The ailing UK property market is in desperate need of a boost after years of rising mortgage rates.

Persimmon shares rose 1.2%, Taylor Wimpey added 0.5%, and Barratt Developments ticked 0.5% higher.

The housebuilding sector had started the day considerably higher before the rally faded as the session progressed.

Companies supplying the construction trade also received a boost; Howden Joinery and Marshalls rose just under 1%.

Falling inflation will also help bolster household spending power, although analysts warned there is no quick fix for the pressures on households in the coming months.

“While this is a step in the right direction, officials are forecasting that we’ll continue to see similar levels of inflation in 2024. This means it’s likely we won’t reach the Government’s 2% target until 2025 – a year later than originally expected – so households who have had consistent strain on their pockets in recent months will see this continue,” said Gina Silvester, Chief Operating Officer at wealth app Chip.

Oil drops as US leads Navy task force in Red Sea

Eve Katz
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7
Oil drops as US leads Navy task force in Red Sea

Oil fell on Tuesday after spiking earlier in the week on reports Yemen’s Houthi rebels attacked cargo ships in the Red Sea.

WTI Crude was down 0.50% at the time of writing on Tuesday, while Brent Crude traded down 0.36%.

The Red Sea attacks prompted the United States to initiate an international naval operation to safeguard ships on the Red Sea route.

A number of other states and organisations are now enforcing their own initiatives in order to prevent any further attacks in the area from happening.

The Red Sea is bordered by the Bab al-Mandab Strait, also known as the Gate of Tears, in the south, near Yemen’s coast, and by the Suez Canal in the north. 

The sea serves as a crucial passage for transporting oil, consumer goods, and liquefied natural gas.

The Houthis have been publicly stating that they will continue to monitor the Red Sea and attack all Israel-related ships.

“Even if America succeeds in mobilising the entire world, our military operations will not stop, no matter the sacrifices it costs us,” said Mohammed al-Bukhaiti, a senior Houthi official, in a post on Tuesday.

Where next for oil?

Also capping gains, “supply continues to outstrip demand, and this dynamic is forecast to continue into the new year,” said David Morrison, Senior Market Analyst at Trade Nation.

The front-month WTI briefly fell below $68 last week, reaching its lowest point since June of this year.

“This has held ever since, and crude has managed to rally off here, although not in the spectacular fashion that we saw in equities, precious metals, and bonds following the dovish Federal Reserve monetary policy announcement. In fact, a look at the chart tells us that oil’s gains have been hard-fought so far, which makes one wonder if they could be undone quite quickly,” stated David Morrison.

“But oil was very oversold, and bulls should be heartened knowing that the MACDs on the daily chart and all lower time frames are turning up quite neatly, building on the positive divergences that have developed since the beginning of this month. Fundamentally, supply continues to outstrip demand, and this dynamic is forecast to continue into the new year. But tankers are now avoiding the Red Sea due to an increase in Houthi drone and missile attacks from Yemen. That may also offer some support,” he added.

FTSE 100 flat as traders eye Christmas break, Ocado jumps

UK Investor Magazine
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2
FTSE 100 flat as traders eye Christmas break, Ocado jumps

It was evident the City was winding down for Christmas on Tuesday as the FTSE 100 gently undulated around the unchanged level on lower volumes.

Yesterday, London’s leading index played catch up with US equities as oil prices helped lift BP and Shell after BP said they were rerouting their oil vessels away from the Red Sea after a string of attacks by Yemeni militants. 

This support was absent from UK stocks today as BP and Shell fell 0.8% and 0.4%, respectively.

Reports that a coalition of Navies led by the US was heading to the Red Sea spurred traders to close long positions in oil futures. Brent and WTI retreated on Tuesday. 

Global equities are likely to be supported by interest hopes through the festive period. Although the FTSE 100 is lagging behind US peers, London’s leading index is set to support statistics pointing to a festive rally.

The conversations around when the Bank of England and Federal Reserve will cut rates will likely continue into the new year. However, with traders away from their desks and newsflow slowing, we’ve likely seen the biggest equity market moves for 2023.

“It feels like the party which started last Wednesday when the Federal Reserve signalled potential rate cuts in 2024 has fizzled out – as the central bank has looked to put a lid on market hopes for an easing in monetary policy,” said AJ Bell investment director Russ Mould.

Ocado was one FTSE 100 company that was definitely carrying on the party on Tuesday, with gains of 4%. The premium retailer is considered as a tech stock by many and trades more like Tesla than Sainsbury’s.

Ocado is the FTSE 100’s best performer in December so far, gaining a bumper 25%.

Four in ten consumers believe their finances won’t improve in 2024 – AJ Bell

Eve Katz
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8
Four in ten consumers believe their finances won’t improve in 2024 – AJ Bell

This week, AJ Bell released the results of a recent online survey, which showed that four in ten (40%) of the UK’s consumers think their personal finances won’t improve in 2024.

The online survey was carried out by Opinium in December on behalf of AJ Bell and included 2,000 participants. 

“Consumers aren’t banking on a miraculous boost to their personal finances in 2024, with four in ten expecting no improvement from a pretty grim 2022,” said Laith Khalaf, head of investment analysis at AJ Bell.

Despite rising 4.7% in the 12 months to October 2023, “inflation is now falling away, and it’s widely thought that interest rates have peaked, but it’s unlikely we’ve hit rock bottom for consumer finances,” said Laith Khalaf.

“That’s because while inflation is cooling, it’s still building on previous double-digit levels. Two years on from the first rate hike from the Bank of England, Brits are also digging in for the long haul on interest rates,” he added.

Khalaf further noted that while markets are eagerly anticipating upcoming interest rate cuts, consumers remain unconvinced, with only one in five expecting interest rates to fall by the end of the next year.

When it comes to personal and household-based spending, nearly 75% of individuals have reported adjusting their lifestyles in reaction to increased inflation and interest rates.

The data highlighted that about 40% have reduced their usage of gas and electricity. And 27% have curtailed holiday spending, while 25% have shifted to a more budget-friendly supermarket, and 17% have cancelled subscriptions like streaming or gym memberships.

“Clearly, there’s a lot of belt-tightening and trading down going on, which has a knock-on effect on the UK economy. UK growth projections for 2024 are pretty anaemic, and there has to be a wide margin for forecast error given the exceptional change in the interest rate environment. Changes to working patterns were also seen among the participants,” stated Khalaf.

This further suggests that “consumers are rightly holding on to their investments for the long term where possible, though this figure is probably also reflective of the fact that fewer people hold investments compared to cash accounts,” he added.

Additionally, “In pensions, only 4% have cut back on contributions, no doubt because reducing payments also means giving up tax relief and, in many cases, employer contributions too. However, just over one in five now expects to retire later as a result of the current economic situation.”.

A small number of individuals have sold investments or reduced pension contributions, considering the severity of the financial crisis affecting consumers. Specifically, only 5% have sold investments, a figure considerably lower than the 25% who have drawn from their cash savings.

Nonetheless, “the good news is that wages are still growing, but those extra pennies are also being eaten by bigger mortgage payments and higher taxes. We’re only part of the way through the real effects of the huge repricing in mortgage rates, and the popularity of fixed rates in the last few years means we can expect considerable pain from higher housing costs in 2024 and beyond,” further stated Laith Khalaf.

“Meanwhile, over the next five years, the tax burden is forecast to rise to its highest level since the Second World War. With income tax and other thresholds frozen, or in some cases, cut, the taxman is going to be a ravenous extra mouth to feed for consumers,” he added.

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