FTSE 100 flat ahead of the Jackson Hole Symposium

UK Investor Magazine
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FTSE 100 flat ahead of the Jackson Hole Symposium

The FTSE 100 again offered little in the way of fluctuations on Monday, with almost exactly half of London’s leading stocks trading positively and half negatively at the time of writing.

After a bumper rally in US stocks and a more measured recovery in the FTSE 100, the balance of risks provided little impetus for investors to make major adjustments to their portfolios.

“Stocks look set to struggle for a sense of direction at the start of a week dominated by ongoing conflicts and US domestic politics, while China’s economic difficulties come into focus again,” explained Hargreaves Lansdown’s Susannah Streeter.

“The precariousness of the latest talks in the Middle East amid high tensions between Russia and Ukraine may also be weighing on sentiment.”

Some investors may choose to sit out the quiet August trade, opting to wait for fresh catalysts to fire up equities. That could come later this week with the Jackson Hole Symposium.

“Later in the week attention is likely to turn to the Jackson Hole Symposium in Wyoming, with Federal Reserve chair Jerome Powell scheduled to speak on Friday,” said AJ Bell investment director Russ Mould.

“Investors will be looking for hints on the trajectory of rate cuts, with a cut in September more or less a racing certainty in the minds of most observers.

“Powell’s words and tone could help determine whether the market’s bounce since the short, sharp shock in early August is sustained.”

Although traders will be fixated on Powell’s every word later this week, the Jackson Hole Symposium has a history of resulting in an anticlimax for equities.

As investors awaited events later in the week, 85 of the FTSE 100’s constituents were up or down less than 1% at the time of writing.

Despite questions about China, there was a distinct bid in mining names, including Glencore, Rio Tinto, and Anglo American. JD Sports was the top riser with a gain of 2%.

Pershing Square Holdings, down 2%, was the top faller.

BATM focuses on growth

Andrew Hore
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BATM focuses on growth

BATM Advanced Communications (LON: BVC) reported flat interim revenues due to lower revenues from networking technology, but the outlook is more positive.

Cyber and diagnostics revenues grew, while networking revenues fell from $11.6m to $6m. New orders are being won in the networking division and there should be an improved second half. A new deal with Amazon should boost next year’s revenues.

In the six months to June 2024, revenues dipped from $60.2m to $60m, while pre-tax profit improved from $726,000 to $788,000. This was helped by the revaluation of a liability that reduced the to...

AIM movers: Hummingbird Resources refinancing and Landore Resources reschedules sale payments

Andrew Hore
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AIM movers: Hummingbird Resources refinancing and Landore Resources reschedules sale payments

Hummingbird Resources (LON: HUM) has completed a strategic refinancing of part of its existing loan facilities with Coris Bank International, which is controlled by the company’s largest shareholder. The $25m refinancing has an annual interest rate of 12% and lasts 24 months. This will repay existing lending. This will help Hummingbird Resources ramp-up commercial gold production in Mali and Guinea. The share price increased 19.1% to 8.1p.

Intercede Group (LON: IGP) has secured a strategic partnership with Microsoft. Intercede’s Credential Management Systems technology will be combined with Microsoft’s Entra ID, which is cloud and identity and access management technology. This will enable administrators to create and register FIDO passkeys on devices. The share price improved 10.4% to 191.5p.

Pharma data services provider Diaceutics (LON: DXRX) has launched PMx, a suite of services for the promotion and commercialisation of precision medicines. A leading biotech will be the primary promotional partner for the Launch of a cancer medicine. Fees will be based on patient recruitment and the deal is worth an initial £2.4m with additional milestone fees of £1.9m based on successful recruitment. The share price is 7.26% higher at 133p.

Neometals (LON: NMT) has raised $3m at 4.5 cents/share from William Robert Richmond. Net cash will be $9.3m and this will finance the company’s lithium-ion battery recycling business to the industrial validation stage. The share price is 7.14% ahead at 3.75p.

Maritime Invest Scandinavia has sold its 5.73% stake in Windward (LON: WNWD) ahead of the maritime AI technology developer’s interims on Tuesday. The share price recovered 6.64% to 112.5p.

FALLERS

Last week, shareholders in semiconductors designer Sondrel (LON: SND) voted to cancel the admission to AIM on 21 August. The share price fell a further 10.2% to 1.325p.

Landore Resources (LON: LND) has agreed a rescheduling of the remaining payments for the disposal of Miminiska Lake and Keezhik Lake to Storm Exploration. There will be a cash payment of $262,500, plus a cash or shares payment of $250,000 on 20 September. This will be followed by a $275,000 payment in March 2025 and $1.31m in March 2026. The share price dipped 9.09% to 3.5p.

Global Petroleum (LON: GBP) has raised a further £250,000 via a retail offer at 0.065p/share on top of the £600,000 in the placing. Global Petroleum is setting up a joint venture with Callum Baxter, former chief technical officer of Greatland Gold (LON: GGP), to diversify into mineral exploration in Western Australia. Global Petroleum will pay £200,000 for 70% of the joint venture and Callum Baxter will retain the other 30%, although this can be increased to 80% for an additional £50,000. Global Petroleum will spend a minimum of £750,000 over 12 months and fund 100% of spending until a decision to mine. Under a consultancy agreement Callum Baxter will receive 200 million Global Petroleum shares and 10% of the total number of new shares issued in the fundraising. The share price declined 6.25% to 0.075p.

EnergyPathways (LON: EPP) has submitted a gas storage licence application to the North Sea Transition Authority for the planned Marram Energy Storage Hub (MESH). This development could supply gas and green hydrogen to the UK for at least two decades. The share price fell 4% to 2.4p.

H&T Group – Significantly Undervalued On 6.9 Times Earnings – It Is Almost Like Giving Money Away! 

Mark Watson-Mitchell
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H&T Group – Significantly Undervalued On 6.9 Times Earnings – It Is Almost Like Giving Money Away! 

Tomorrow morning will see the UK’s largest pawnbroking company, the H&T Group (LON:HAT), declare its Interim Results to end-June. 

As far I can see it this group’s shares are massively undervalued and are overdue for a re-rating. 

The Business 

The principal activities of the £175m capitalised group include pawnbroking, gold purchasing, retail of new and pre-owned jewellery and watches, foreign currency and other related services operated through Harvey & Thompson Limited. 

Its segments include pawnbroking, gold purchasing, retail, pawnbroking scrap, personal loans, foreign exchange and other services. 

Apart from being the UK’s largest pawnbroker, it is also a leading retailer of high quality new and pre-owned jewellery and watches and provides a range of financial products tailored for a customer base which has limited access to or is excluded from the traditional banking sector.  

Its store estate of some 280 stores across the UK provide customers with small-sum short-term non-recourse pawnbroking loans secured by pledged personal property, that consists primarily of gold, jewellery items and watches.  

H&T also buy and sell new and pre-owned gold, jewellery items and watches along with providing foreign currency exchange, international money transfer, third-party cheque encashment and watch repair services to its customers.    

Sales By Activity In 2023 

Pawnbroking – £90.41m – 40.9% of group sales.  

The pawnbroking segment is engaged in providing secured loans against collateral (the pledge). 

Gold Purchasing – £42.81m – 19.5%.  

Its gold purchasing segment is engaged in buying jewellery directly from customers through its stores. 

Retail – £48.58m – 22.1%. 

The retail segment is engaged in retail sales of primarily gold, jewellery and watches, and the retail sales are forfeited items from the pawnbroking pledge book or refurbished items from its gold purchasing operations. 

Pawnbroking Scrap – £27.91m – 12.7%. 

Its pawnbroking scrap segment consists of gold scrap sales of its inventory assets other than those reported within gold purchasing. 

Unallocated Foreign Exchange – £7.14m – 3.2%. 

Other Services – £3.68m – 1.6%. 

Latest Trading Update 

On Tuesday 23rd July the group announced its Interim Trading Update. 

In that statement the company noted that the six-month period to 30th June saw trading in line with expectations. 

It stated that the availability of small sum credit continued to be constrained generally for consumers and demand for the company’s pawnbroking offer had been robust.  

Redemptions have taken a little longer to moderate than anticipated, following the pickup of redemptions in Spring but they have moderated through June and into July.   

The capital value of the pledge book (excluding accrued interest and provisions) at 30th June was £105m (30th June 2023: £95m; 31st December 2023: £101m).  

The company noted that all key pledge book metrics had remained in line with expectations. 

Retail sales, through the demand for the group’s high quality new and pre-owned jewellery and watches, and foreign currency revenues continued to perform in line with forecasts, while its scrap margins are improving as expected. 

CEO Chris Gillespie stated that: 

“I am pleased to report that overall, trading performance in the first six months of the financial year has been in line with our expectations.  

I look forward to updating the market fully when we announce the Group’s Interim Results on 20th August.” 

The Equity 

There are some 43.99m shares in issue. 

The larger holders include FIL Investment Advisors (UK) (9.92%), Close Asset Management (8.62%), Hargreaves Lansdown Asset Management (5.12%), Artemis Investment Management (5.01%), Fidelity Management & Research (4.49%), Premier Fund Managers (3.23%), Camelot Capital Partners (2.71%), Janus Henderson Investors UK (2.45%), Octopus Investments (2.17%) and Abrdn Investment Management (1.89%). 

Analyst Views 

Analyst Gary Greenwood at Shore Capital has a 530p a share valuation on the group’s equity. 

For the current year to end-December he estimates that the company will lift its adjusted pre-tax profits to £33.5m (£226.4m), generating 57.2p (48.7p) in earnings and paying a dividend of 18.5p (17.0p) per share. 

For the coming year he sees £36.7m profits, 62.7p of earnings and a 20.0p dividend per share. 

Over at Hardman & Co, analyst Mark Thomas is looking for 2024 sales of £248.4m (£220.7m), with profits of £31.9m and 55.1p of earnings, with a dividend of 18.5p. 

For 2025 his estimates show £267.2m sales, £34.6m profits, 59.8p earnings and a dividend of 19.5p per share. 

Thomas has a 528p indicative value on the shares. 

In My View 

I have followed this company in its various forms for nearly four decades – even holding 15% of its equity at one stage – I love its business model, and it continues to fascinate me. 

It remains an ongoing profit-growth story that is worthy of any investor’s portfolio. 

Its shares, which were up to 502p early last October and are now just 397p, are significantly undervalued trading on a mere 6.9 times current year price-to-earnings. 

It is almost like giving money away! 

Cornish Metals shares gain on South Crofty tin mine drill results

UK Investor Magazine
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Cornish Metals shares gain on South Crofty tin mine drill results

Cornish Metals has reported promising results from its recently completed drilling program at the Wide Formation target near its South Crofty tin project in Cornwall.

The company successfully completed a 14-hole, 8,993-meter drilling program, testing tin mineralisation over a substantial area of 2,500m by 800m. The program confirmed the Wide Formation structure over a strike length exceeding 2,500m and a downdip extent of at least 800m, with true thicknesses ranging from 2m to 10m.

Investors may also be interested to learn the campaign encountered notable copper intercepts.

High-grade tin intercepts were encountered in several areas of interest. Within the Wide Formation, a significant intercept of 10.55m grading 0.19% Sn was found, including a high-grade zone of 1.49m grading 0.72% Sn in hole CB23_012.

The drilling also identified steeply-dipping, high-grade ‘Dropper’ zones between the Great Flat Lode and the Wide Formation, with impressive results such as 1.56m grading 0.76% Sn in CB23_010, 2.07m grading 0.85% Sn in CB23_012, and 1.97m grading 0.66% Sn also in CB23_012.

The program also intersected tin mineralisation associated with the Great Flat Lode and the Great Flat Lode Splay, as well as a new structure interpreted as the eastern extension of the Great Condurrow Mine’s Main Lode.

“This drilling programme has validated the Wide Formation as a new, large-scale, tin-bearing exploration target that is potentially accessible from the underground workings at South Crofty,” said Ken Armstrong, Interim CEO and Director of Cornish Metals.

“Mineralisation has been traced over a 2,500m extent, up to 800m down dip, and remains open along strike and to depth. Furthermore, in addition to the earlier discovery of the Great Flat Lode Splay and new ‘Dropper’ zones of high-grade tin mineralisation, the discovery of polymetallic tin and copper mineralisation within the interpreted extension of the Great Condurrow Mine’s Main Lode further demonstrates the exploration potential of the South Crofty area.”

Barratt Developments and Redrow merger set to complete this week

UK Investor Magazine
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Barratt Developments and Redrow merger set to complete this week

Barratt Developments and Redrow are set to complete their merger this week despite ongoing scrutiny from the Competition and Markets Authority (CMA).

The CMA’s Phase 1 investigation, which concluded on August 8, 2024, found no UK-wide competition issues but raised concerns about the supply of newly built private residential housing in one local area out of over 400 where the companies overlap. The one sticking point is an area in Shropshire relating to just ten plots.

In response, Barratt has waived the CMA clearance condition, allowing the merger to proceed. However, the CMA is expected to impose an initial enforcement order (IEO) following completion, preventing the integration of the two businesses until proposed undertakings are agreed upon. This move is in line with the CMA’s standard practice to prevent actions that might prejudice their process.

On Monday, Barratt announced strategic plans for the combined group, including key appointments and branding decisions. The new company will be called Barratt Redrow plc.

The company intends to begin full integration as soon as permissible, aiming to complete the process within 18 months of completion.

Redrow shares were 2.9% higher at the time of writing, while Barratt’s rose 1.2%.

Helix Exploration encounters strong helium concentrations in Montana

UK Investor Magazine
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Helix Exploration encounters strong helium concentrations in Montana

Helix Exploration has reported significant helium discoveries within the ‘Montana Helium Fairway’. The company said it had identified elevated helium levels in two key formations during its ongoing drilling operations.

While drilling the Amsden formation at a depth of 3,885 feet, Helix detected helium concentrations an astounding 50 times above background levels. This discovery, coupled with low gamma readings, suggests the presence of a clean reservoir teeming with helium.

As Helix’s Clink #1 well went deeper into the Charles Formation, multiple gas shows from 4,860 feet downwards revealed helium concentrations at a bumper 130 times above the background level.

The company, however, has warned that high levels of helium do not automatically constitute an economically viable resource, and further evaluation is required.

As drilling continues, Helix Exploration remains focused on reaching its primary target in the Flathead Formation, approximately 7,410 feet below the surface. With a planned total depth of around 8,000 feet, the company reports that operations are progressing smoothly and on schedule.

When the drilling is complete, Helix will progress to wireline logging to evaluate the project further before a discovery can be confirmed.

Helium is used in a wide range of industrial and medical applications and has experienced shortages in recent years, although there have been reports the supply shortage has rectified itself through 2024.

Director deals: Latest disappointing trading statement is a buying opportunity

Andrew Hore
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Director deals: Latest disappointing trading statement is a buying opportunity

Gooch & Housego (LON: GHH) published another disappointing trading statement last week. Following the trading statement, Elaine Sullivan, who is associated with chairman Gary Bullard, acquired 2,000 shares at 456p each and 5,000 shares at 463p each.

That takes Gary Bullard’s stake to 54,200 shares. Previous purchases earlier in the year were at higher prices.

Odyssean Investment Trust increased its stake from 10.1% to 11.1%, while Canaccord Genuity reduced its shareholding from 6.2% to 4.9%.

Business

Gooch & Housego says destocking is coming to an end, but delays in busine...

Opportunities in contextual advertising

Andrew Hore
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Opportunities in contextual advertising

It sems to have been talked about for years, but it appears that third-party cookies are going to be a thing of the past in the near future. This will make it more difficult to collate data to enable the personalisation of advertising. It means that advertisers will look for other ways of gaining value for money from their advertising spending.

Third-party cookies are used to track users over different websites to form an understanding of their online behaviour and interests. This information is sent to a server to analyse the data and monitor the success of campaigns.

Some organisation...

Aquis weekly movers: ProBiotix Health China deal

Andrew Hore
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Aquis weekly movers: ProBiotix Health China deal

ProBiotix Health (LON: PBX) has secured a commercial agreement for InstaMelt with DanCare Health. InstaMelt is a food supplement dosage format that offers innovative features for health brands. DanCare will launch the supplement in China in the fourth quarter under its own brand. The share price jumped by three-fifths to 4p.

Fenikso (LON: FNK) has invested up to $250,000 in a six-month secured convertible loan note issued by AIM-quoted Coro Energy (LON: CORO). This loan provides an annualised coupon of 40%. The loan is secured on the shares of Coro Asia Renewables, which owns renewable assets in the Philippines. Fenikso has more than $5m in cash left in the bank. The share price rose 18.7% to 1.425p.

Phoenix Digital Assets (LON: PNIX) is buying back up to 140 million shares and it can spend up to £7.5m. The programme lasts until 23 July. So far, nearly £10,000 has been spent on 500,000 shares. The share price improved 15.5% to 4.1p.

Ormonde Mining (LON: ORM) has appointed Steve Nicol as a non-executive director. He has been working with the company for many years. The share price edged up 10% to 0.275p.

FALLERS

St Mark Homes (LON: SMAP) shares continue to decline ahead of the departure from Aquis on 2 September. The price fell by one-quarter to 6p.

Valereum (LON: VLRM) is using Fireblocks’ technology as part of its infrastructure. It will enable secure sending and storing of digital assets. The Fireblocks advanced wallet security technology will be integrated in the platform. A subsidiary has been set up in El Salvador. The share price fell 13.7% to 3.15p.

Coinsilium Group (LON: COIN) chief executive Eddy Travia bought 300,000 shares at 1.6p each and executive chairman Malcolm Palle has acquired 300,000 shares at 1.62p each. The share price declined 2.86% to 1.7p.

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