HydrogenOne Capital Growth issues update on hydrogen-powered aircraft investment

UK Investor Magazine
-
0
HydrogenOne Capital Growth issues update on hydrogen-powered aircraft investment

Cranfield Aerospace Solutions Limited (CAeS), a portfolio company of HydrogenOne Capital Growth, has signed an agreement with drone airline Dronamics to supply hydrogen fuel cell propulsion systems for the Dronamics Black Swan cargo aircraft, HydrogenOne announced Thursday.

The memorandum of understanding positions CAeS as the preferred supplier of the hydrogen fuel cell systems to Dronamics starting in 2026. It also includes a letter of intent for CAeS to provide a substantial number of the propulsion systems.

CAeS and Dronamics have been conducting joint feasibility studies since November to evaluate using CAeS’ technology in the Black Swan drone, which can carry up to 350 kg of cargo for distances up to 2,500 km. The studies concluded the hydrogen fuel cell system meets the aircraft’s payload, cargo volume and range requirements.

HydrogenOne said the Dronamics agreement validates their strategy of investing in leading hydrogen technology innovators. As of June 30, the investment manager’s stake in CAeS represented 8% of its net asset value.

Dr JJ Traynor, Managing Partner of HydrogenOne Capital LLP, the Company’s Investment Adviser, commented: 

“Today’s new agreement with Dronamics underlines the substantial potential to deploy Cranfield’s technologies across the aviation sector, to decarbonise flight.”  

Boohoo shares are set for a challenging winter

UK Investor Magazine
-
0
Boohoo shares are set for a challenging winter

Boohoo shares are down 18% year-to-date after releasing a string of disappointing results and trading updates through 2023.

In their most recent interim results from the six months to 31 August 2023, Boohoo said group revenue fell 17% and lost £9.1m in the period.

The poor performance reflects a tough microenvironment but also internal struggles at Boohoo.

Boohoo saw revenue decline across all geographical segments in the first half. The UK was the worst hit, with sales dropping 19%, and investors would have been upset to see US revenue fall 11%.

“Boohoo, the party’s on hold for now – the online fashion retailer enjoyed a spectacular run between its IPO in 2014 and 2021, becoming the epitome of fast fashion. But since then, the celebrations have been muted and performance has been lacklustre, to say the least,” said Aarin Chiekrie, equity analyst at Hargreaves Lansdown, shortly after Boohoo reported in early October.

Many have used savings to fund holidays and other discretionary spending, including new clothes, during the cost of living crisis. This cannot last forever.

Boohoo had previously blamed poor performance on supply chain issues, yet these have receded, and Boohoo continues to see deterioration across the business.

“A lot of the issues which are outside of the group’s control have eased though – supply chains are unclogging, shipping costs have sunk back to normal levels, and overall cost inflation has slowed. Yet despite these tailwinds, boohoo turned loss-making in the first half, highlighting the sticky position the group finds itself in,” said Chiekrie.

With interest rates set to remain higher for a prolonged period, the macro picture will give Boohoo no quarter throughout the winter. In addition, the unseasonably warm weather through October will have dampened demand.

Challenging external conditions are unlikely to afford Boohoo management the fruits of improvements to internal systems, including distribution and pricing.

The culmination of these factors will likely see Boohoo shares fall beneath 30p over the winter.

Components for potential upgrades

Andrew Hore
-
0
Components for potential upgrades

Demand remains strong in the commercial vehicles market and components suppliers are prospering, when many companies in other sectors are finding that trading conditions are tough and business is being delayed.
Heavy trucks demand remains higher than average. One fully listed automotive components supplier has recovered strongly since the Covid lockdowns and three-quarters of its revenues come from heavy trucks. Demand is outstripping the company's capacity. Higher energy costs have been passed on to customers.
Yet the rating is still low, and the yield is attractive even in these days of hi...

Commercial property: is the cycle turning?

Aberdeen Investment Trusts
-
0
Commercial property: is the cycle turning?

Will Fulton and Jamie Horton, Investment Managers, UK Commercial Property REIT

  • Interest rates have dented commercial property valuations over the past 18 months
  • Three elements are crucial to the outlook for the commercial property sector: revaluation, investment recovery and a supply squeeze
  • There are still vulnerable parts of the market, particularly in the office market

Commercial property has faced two major challenges over the past 18 months. Rising interest rates led to the fastest revaluation of commercial property assets recorded, with reductions particularly felt at the lower yielding end of the market. At the same time economic conditions have meant occupier demand in certain segments of the market has remained unpredictable or weakened. While it has unquestionably been a turbulent period, there are reasons to believe the cycle may be turning for high quality commercial property from here.

We identify three key elements that are crucial to understanding the outlook for the commercial property sector: revaluation, investment recovery and a supply squeeze. Our view is that the revaluation of the property market is largely behind us with the exception of the office sector which is facing structural challenges. While calling a peak in interest rates is a challenge that even the Bank of England shies away from, our central expectation is that interest rates will rise once or twice more before starting to fall next year. Inflationary pressures have weakened, and the Bank of England has made it clear that further rate rises will be data-dependent.

For the industrial sector, where operational performance is still strong, this suggests that asset values should recover albeit they are unlikely to achieve the extremely low yields witnessed in late 2021 / early 2022. However, there are still vulnerable parts of the market, where valuations could dip lower. We see this particularly in the office market, where landlords face the combined challenge of reduced occupier demand as a result of post-Covid working habits and an increase in costs to provide the amenity and ESG credential tenants require.

Investment recovery will depend on a revival in the economy and the UK is unlikely to recover significantly until interest rates start to drop. The interest rate cycle has had a more significant impact on commercial property markets in this cycle compared to previous cycles as it followed a long period of historically low rates followed by sharp increases. If interest rates start to drop next year, there is a case for an investment recovery led initially by rate cutting and thereafter economic growth. Again, we believe the higher quality sectors with structural growth potential will be the early beneficiaries.

We have also identified an imminent supply squeeze in certain segments of the commercial property market such as industrials as development has been constrained by rising build costs, increased finance rates and weakening yields. We therefore still see potential for strong rental growth in the industrial sector and in alternatives, and this is where we are focusing our attention for the portfolio. There isn’t enough space, particularly in the right spots, to meet demand.

How we are handling it

While the outlook is improving, until the interest rate cycle has clearly turned there is still uncertainty. UKCM continues to focus on high-quality assets, with strong operational characteristics to maintain resilience into the portfolio. This is shown in our occupancy and rent collection statistics – 99% and 96% respectively. 

We continue to refine our portfolio to ensure that every asset meets our investment criteria and we have prioritised balance sheet discipline while debt costs remain elevated. This year, it has seen us sell a very low-yielding prime distribution warehouse, Hannah Close in Wembley. Existing lease agreements meant that low yield was constrained and it wasn’t possible to realise the full underlying rental value until 2029. We had also completed our full asset management plan on the property, leaving less upside to its valuation and used the proceeds to reduce the amount drawn on our revolving credit facility by 71%. While our overall debt costs are low, the cost of this facility which is now only 12% of our total borrowings has risen.

We have made great progress on our development programme completing three properties across the industrial and student hosing sectors. Our last remaining development is the Hyatt-branded hotel in Leeds’ Sovereign Square. As well as a fantastic location in thriving Leeds and a great brand in Hyatt, it has strong ESG credentials, an increasingly important factor in the hotel market. Construction continues at pace, and on completion the hotel will deliver a yield of 7.25% with the hotel opening early Q3 2024.

Rental demand

At a time of higher inflation, being able to push through rental increases is vital and a key advantage for commercial property over fixed income investments. Rental uplifts across the portfolio have generally been encouraging as we seek to capture the reversion within the portfolio we own through careful asset management.

Nevertheless, the economic picture is still fragile and certain sectors still look vulnerable. As a result our portfolio is well-diversified by sector, geography and with a mix of 193 tenants. We remain judicious in our focus on quality assets and also in our tenant selection and mindful of how the economic climate might change.

The Company’s dividend yield of 6.6% compares favourably to the higher quality end of the fixed income market, while also giving the potential for income growth. This puts us in a good position should the interest rate cycle start to turn next year.  

Companies selected for illustrative purposes only to demonstrate the investment management style described herein, and not as an investment recommendation or indication of performance.

Important information

Risk factors you should consider prior to investing:

  • The value of investments, and the income from them, can go down as well as up and investors may get back less than the amount invested.
  • Past performance is not a guide to future results.
  • Investment in the Company may not be appropriate for investors who plan to withdraw their money within 5 years.
  • The Company may borrow to finance further investment (gearing). The use of gearing is likely to lead to volatility in the Net Asset Value (NAV) meaning that any movement in the value of the company’s assets will result in a magnified movement in the NAV.
  • The Company may accumulate investment positions which represent more than normal trading volumes which may make it difficult to realise investments and may lead to volatility in the market price of the Company’s shares.
  • The Company may charge expenses to capital which may erode the capital value of the investment.
  • Derivatives may be used, subject to restrictions set out for the Company, in order to manage risk and generate income. The market in derivatives can be volatile and there is a higher than average risk of loss.
  • There is no guarantee that the market price of the Company’s shares will fully reflect their underlying Net Asset Value.
  • As with all stock exchange investments the value of the Company’s shares purchased will immediately fall by the difference between the buying and selling prices, the bid-offer spread. If trading volumes fall, the bid-offer spread can widen.
  • Certain trusts may seek to invest in higher yielding securities such as bonds, which are subject to credit risk, market price risk and interest rate risk. Unlike income from a single bond, the level of income from an investment trust is not fixed and may fluctuate.
  • Yields are estimated figures and may fluctuate, there are no guarantees that future dividends will match or exceed historic dividends and certain investors may be subject to further tax on dividends.

Other important information:

Issued by abrdn Investments Limited, registered in England and Wales (740118) at 280 Bishopsgate, London EC2M 4AG. abrdn Investments Limited, registered in Scotland (No. 108419), 10 Queen’s Terrace, Aberdeen AB10 1XL. Both companies are authorised and regulated by the Financial Conduct Authority in the UK.

Find out more at www.ukcpreit.com and register for updates here. You can also follow us on social media here: Twitter and LinkedIn.

FTSE 100 flat as investors realign portfolios

UK Investor Magazine
-
0
FTSE 100 flat as investors realign portfolios

The FTSE 100 was flat on Wednesday as investors realigned their portfolios after a sharp rally yesterday.

Sentiment improved dramatically yesterday after comments from Federal Reserve officials dispelled fears around interest rates and China stimulus hopes lifted stocked.

On Wednesday, investors took a step back awaiting further developments and focused on portfolio composition.

The FTSE 100 was up just 3 points going into the close on Wednesday.

“The surge of optimism, fuelled by hopes the Fed will go easier with its interest rate policies and buoyed by expectations of fresh stimulus in China, appears to have plateaued,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“A little more caution is returning, as investors look ahead to tomorrow’s snapshot of inflation in the United States. The surge in equities was fuelled by comments from Fed decision makers indicating a careful policy approach given sharp rise in borrowing costs. But the rally appears to be taking a breather for now.”

There was a definite leaning towards defensive stocks on Wednesday with utilities and tobacco stocks among the top risers. Imperial Brands and BT were among the better performers, both adding around 1.5%.

SSE enjoyed a 1.3% rise and United Utilities jumped 1.6%.

Bargain hunters were also out in force for financials impacted by interest rate expectations. M&G rose 2% while Barclays and Hargreaves Lansdown had a solid session.

Horizonte Minerals shares resume decline on funding worries, drop beneath 20p

UK Investor Magazine
-
1
Horizonte Minerals shares resume decline on funding worries, drop beneath 20p

In the absence of any update on crucial financing discussions, Horizonte Minerals shares have resumed their decline and have fallen beneath 20p in early trade on Wednesday.

Last week, the nickel miner issued a warning they had miscalculated the capital requirements to achieve first production at their Araguaia nickel mine in Brazil.

The company said they were exploring financing options to plug the 35% increase in capital expenditure requirements but are yet to issue any further details.

The void is increasing speculation around Horizonte’s ability to raise the finance and how heavily existing shareholders will be impacted by any funding package.

Horizonte Minerals made huge progress in securing funding for the Araguaia mine last year and has started mine construction at the project. Funding uncertainties will delay the commencement of production until later in 2024.

From a technical perspective, the intraday lows around 14p may have to be tested for Horizonte Minerals shares to build a formidable base.

Samsung issues Q3 profit guidance, shows signs of recovery

Eve Katz
-
0
Samsung issues Q3 profit guidance, shows signs of recovery

Korea’s largest electronics and memory chip producer, Samsung, released on Wednesday that third-quarter profit dropped by a smaller-than-expected 78%.

The company further stated that its consolidated Q3 sales are at approximately 67 trillion Korean won, while its consolidated operating profit is expected to be approximately 2.4 trillion Korean won. Samsung generated 60 trillion Korean won in revenue in Q2.

The consolidated operating shows sign of a minor upward trend with 2.4 trillion Korean won estimated for Q3. Operating profits were 640 billion won in Q1 and 670 billion won during Q2.

Samsung has been facing a wider slowdown in chip sales and softening demand for consumer electronics.

Samsung shares rose 3.15 percent in Korean trade on Wednesday and are currently worth 68,200 KRW.

Novo Nordisk shares extend rally after stopping Ozempic trial

Eve Katz
-
0
Novo Nordisk shares extend rally after stopping Ozempic trial

In a press release on Tuesday, the Danish company stated that, due to significant early signs of efficacy, they will stop the trial of Ozempic, a type 2 diabetes treatment, a year early.

Novo Nordisk´s shares are up 3.1% at the time of writing and are currently worth 670 DKK in Copenhagen.

The press release further states that the decision to halt one of the trial´s stages early, which will result in the whole process being done a year faster than expected, was based on a recommendation from the Independent Monitoring Committee (DMC).

According to the DMC, results from an interim analysis met a pre-specified criteria that allows Novo to stop the trial stage early.

Novo Nordisk is well-known for Wegony, a weight-loss drug that was found to have significant cardiovascular benefits in August. Since then, the company has seen its shares rise by almost 17%.

In August, the Danish government stated that Novo Nordisk alone had lifted the country’s economic growth forecast by 0.6%.

Novo Nordisk is now Europe’s highest valued listed company and is worth around €385 billion.

AIM movers: Strategic Minerals fusion agreement and Eneraqua Technologies delays

Andrew Hore
-
0
AIM movers: Strategic Minerals fusion agreement and Eneraqua Technologies delays

Strategic Minerals (LON: SML) has signed a five-year memorandum of understanding with Oxford Sigma, which is a nuclear fusion technology developer. Strategic Minerals subsidiary Cornwall Resources, which owns the Redmoor tungsten mine, will collaborate with Oxford Sigma on securing supply of tungsten for fusion. Each fusion reactor needs between 100-5,000 tonnes of tungsten. The share price increased 23% to 0.15p.

Cambridge Cognition (LON: COG) has won a major contract using its core services combined with the recently acquired Winterlight services. The initial contract for providing the services to a clinical trial and training is worth £1m. Revenues will start to be recognised in 2023 and will last two years. If the trial goes well then there is potential for a larger contract. The share price is 6.43% ahead at 74.5p.

Power Metal Resources (LON: POW) has identified significant uranium targets at the Tait Hill ad Soaring Bay projects in Saskatchewan. The results of laboratory tests on soil samples are awaited. Discussions have begun with third parties. The share price rose 6.4% to 0.665p.

Last night, Safestyle (LON: SFE) said it had engaged Interpath Advisory to assist with raising cash or potentially selling the replacement windows and doors business. There is already interest in acquiring the business, while the bank remains supportive based on expectations of a positive outcome to the current process. The share price is 0.82% higher at 2.45p, having been above 3.5p earlier in the day.

FALLERS

Eneraqua Technologies (LON: ETP) is still suffering from delays in energy efficiency spending by social housing companies, although it continues to win contract in this and other sectors. Uncertainty about water standards for new housebuilding have hit the water efficiency technology demand. There had already been downgrades prior to the interims, which were in line with those downgrades, but the full year pre-tax profit forecast has been further reduced by 69% to £1.6m, with £2.4m expected next year. There continues to be underlying demand for the company’s products, but a significant recovery could be a year or more away. The share price slumped 58.4% to 38.5p.

Property investor Caledonian Trust (LON: CNN) has not been able to agree a sale of St Margaret’s House in Edinburgh. Talks with the interested parties did not come to a satisfactory conclusion. The property will be marketed next spring if market conditions improve. The interest rate on a £4m loan from Leafrealm, which is controlled by the Caledonian Trust chief executive, will be reduced from 10 October 2023. The share price declined 18.8% to 130p. NAV was 200.3p/share at the end of 2022.

Shares in Calnex Solutions (LON: CLX) have fallen a further 18.2% to 54p following yesterday’s profit warning that had led to a 30.2% decrease. The telecoms and network testing instrumentation supplier is uncertain about the timing of telecoms customer orders. Revenues will be up to 30% lower than previous expectations.

Steppe Cement (LON: STCM) says third quarter cement revenues improved by 8%, but nine-month figures were 5% lower. The price received for cement declined by 3%. However, cost inflation means that 2023 profit will be lower. The share price is 9.09% lower at 25p.

Ashtead shares have plenty of value to dig up

UK Investor Magazine
-
0
Ashtead shares have plenty of value to dig up

Plant-hire company Ashtead has been one of the world's best-performing FSE 100 stocks for the past 20 years. Each dip in the share price has been proved to be a deft buying opportunity. The recent declines should be no different.
With returns of 145% over the past five years alone, the company's share price reflects strong underlying revenue and earnings growth.
Ashtead provides plant rental services across the US, UK and Canada trading under their brand name Sunbelt.
In 2018, Ashtead generated £3.7bn ($4.54bn) in revenue. This has grown to $9.6bn in 2023. We note company has changed from re...

1...391392393...1,761Page 392 of 1,761