Tekcapital has announced the addition of two AI scientists with experience at Google and Apple to their advisory board as they plan to make investments in Generative AI early-stage companies.

Details were released in Tekcapital’s half-year report which reflected broad progress in their current portfolio companies.

With two of their portfolio companies already listed and another looking set to list this year, Tekcapital has provided exciting insight into their plans for the future.

Tekcapital has brought in AI experts Dr. Russ Salakhutdinov, the former director of AI at Apple, and Alexander Mordvintsev who is currently a Senior research scientist at Google.

These are notable additions and demonstrate a clear intent to invest in the fast-moving Generative AI industry which is attracting the attention of a broad range of businesses – and significant flows of capital.

Cannabis-based ingredients and medicines developer Celadon Pharmaceuticals (LON: CEL) says that it will start supplying its two major customers before the end of the year. It also hopes to sign up a partner to finance the trial of a cannabis-based alternative to opiates.

Earlier, this year AIM-quoted Celadon Pharmaceuticals extended the Home Office licence to enable commercial supply of the active cannabis-based pharmaceutical ingredients it manufactures. Two multi-year contracts worth £3m and £1.2m respectively were won on the back of this approval.

Commercial cultivation has started. The current facility in the Midlands has an annual capacity of around 150kg. Gross margin is estimated to be at least 70%. The two existing contracts could generate £1m of gross profit in a full year, which is not enough to cover overheads.

The LVL pain relief trial will cover up to 5,000 patients and could take up to three years, although it should not be that long. Canaccord Genuity expects the trial to last 12-18 months from its launch, which could be in the first half of next year.

The interim cash out flow from operating activities was £3m. Cash was £1.6m at the end of June 2023 and there is also a £7m credit facility, which Celadon Pharmaceuticals is likely to dip into by the end of the year. The facility is provided by a shareholder and the interest rate is 10% of the amount drawn down.

A partner would finance the pain relief trial and there will be a profit contribution from the initial supply agreements. That does not mean that the cash outflow will be stopped in the medium-term.

Further investment in the company’s facility is required, although the pace of investment will depend on new contracts being won. If the order book builds up there could be a requirement for a fundraising to finance the growth.

The share price slipped 10p to 120p following the interim results. Positive news concerning supply deals and a partner for the pain relief trial should help the share price to recover.

The FTSE 100 fell on Thursday with higher oil prices raising the question of whether we had seen the back of increasing inflation rates.

Brent oil was trading comfortably above $95 on Thursday and the FTSE 100 broke beneath 7,600 to trade at 7,568.

Oil prices have steadily marched higher since Saudi Arabia announced another production cut and Russia banned exports of high-quality fuels.

“Another leg up in oil prices has added to the market worries about sticky inflation, thereby stoking fears that interest rates will stay higher for longer. Brent Crude moved higher to settle around the $95 per barrel mark and WTI was close behind after new data showed a further decline in US stockpiles,” said Russ Mould, investment director at AJ Bell.

“The market is worried that supplies of oil are going to be tight and if prices keep going, it is going to cause a real headache for businesses and consumers.”

Adding to the downward pressure on the FTSE 100, a number of constituents traded ex-dividend on Thursday and these companies dominated the top fallers.

Pheonix Group lost 6% of its value after paying a bumper 26p dividend worth around 5% in shareholder return. Barratt Developments also paid a sizeable dividend leading to a near 6% drop in shares.

Ocado couldn’t find a bid on Thursday and the food distribution and technology company traded at the lowest levels since July. Hopes of a bid from Amazon seem to fading.

Miners were among the top risers as traders stepped in to pick up the beaten-down sector on Thursday.

Rising bond yields

US bond yields rose again reflecting concerns about higher interest rates for a longer period, especially in the US.

This fear has also been evident in US stocks which looked set for another weaker session on Thursday.

Vast Resources shares were dramatically higher on Thursday after the company said operations at their Baita Plai Polymetallic Mine in Romania resumed normal service.

Workers had gone on strike earlier in September after the miner said workers had gone on strike after a salary was missed due to the delay in payment for a concentrate shipment.

Vast Resources sold 316 DMT of copper concentrate in Q2.

Vast Resources shares were 29% higher at the time of writing.

Mitchells and Butlers investors raised a glass to the pub group’s fourth quarter and full-year trading update revealing solid revenue growth across the year and strong sales in both food and drink.

Group like-for-like sales jumped 9.1% for the full year year as drink sales grew 9.6%. Food sales in the fourth quarter surged 11.6%.

Mitchells and Butlers’ shares were 2.3% higher at the time of writing on Thursday.

“Pub giant Mitchells and Butlers has been making hay while the sun shines, and through some rain too. Like for like takings grew 9.1% for the 52 weeks as a whole,” said Derren Nathan, head of equity research at Hargreaves Lansdown.

“The out-performance against the rest of the market is impressive, particularly in a time when customers pockets are facing an unprecedented squeeze. Alongside the cheery update on sales, the news that cost pressures are starting to abate should also bring some comfort to investors.  

“However with the valuation now sitting above the long term average, there’s not much room for disappointments. But for now customers are still prepared to spend a little more on their trip to the pub. If costs stabilise management may not need to ask punters’ to stomach more significant price rises.“

Ceres Power Holdings announced its financial results for the first half of 2023 on Thursday, showing increased revenue, gross profit and continued investment in R&D.

Revenue rose 17% to £11.3 million, while gross profit grew to £6.9 million. However, the company’s loss widened as it invested £30.6 million in developing new technologies in their ‘Investment in the future’ scheme.

Ceres Power shares were down 0.5% to 327p at the time of writing on Thursday.

The fuel cell business drove revenue growth with an increase to £10.6 million. Major operational development in the fuel cell included construction completion on Doosan’s 50MW South Korean factory using Ceres’ technology and Bosch’s power units utilising Ceres fuel cells receiving €160 million in EU funding.

The newer electrolysis business recognized £0.7 million in early revenue. The first megawatt-scale electrolyzer is undergoing testing before deployment to a Shell site in India. New collaborations with Linde and Bosch will demonstrate a megawatt-class electrolyzer in Germany in 2024.

Despite higher revenue and gross profit, Ceres continued to invest heavily in R&D and expanding operations globally which weighed on profits. The loss before interest, tax, depreciation and amortisation widened 19% to £23.8 million.The investment reduced cash reserves to £161.2 million.

Phil Caldwell, Chief Executive Officer of Ceres commented: 

“We are at an important stage of the Company’s growth as we support our partners to scale manufacture for our existing fuel cell business, and make rapid progress in the development of our game-changing electrolyser technology, which will enable new partnerships to address the huge market opportunity for green hydrogen. Our recent inclusion in the FTSE250 index and the recognition for engineering innovation of the MacRobert Award have been made possible by the progress of the Company, and the hard work the team has put into maturing the Ceres technology over many years.”