Premier African Minerals shares edged higher on Friday as investors positioned for the recommencement of lithium production at the flagship Zulu project.

The company has completed the installation of much-needed processing machinery and is set to resume open-pit mining from next week.

Premier African Minerals shares were 1% higher at 0.52p at the time of writing.

Premier is required to ramp lithium production up to 1,000 tonnes per month by 1st November 2023 or face penalty payments contracted with offtake partner Canmax.

The next month will be crucial for meeting these targets and investors will be on the edge of their seats waiting for further updates.

“Subsequent to our update of 23 August 2023, I am pleased to confirm the completion of the installation of the Mill including all necessary feeds and discharge components, pumps, control circuitry and grinding media requirements that is expected to support planned production of up to 1,000 tons per month of spodumene from November 2023 at Zulu,” said George Roach, CEO, in a statement issued yesterday.

“The commissioning phase is now planned to commence from today with first material expected to be fed through the Mill on Monday, 25 September 2023.

“Open pit mining operations at Zulu are expected to resume next week and while there is already substantial material on the run-of-mine pad, it remains critical that the plant has sufficient ore for current processing.

“Further updates will follow in Premier’s unaudited interim results for the six months ended 30 June 2023 which will be published on 29 September 2023.”

The Bank of England made the surprise decision to keep rates on hold on Thursday, with the nine voting members split five to four on whether to keep interest rates at 5.25%.

The FTSE 100 did pop higher in the immediate reaction, but the rally faded shortly afterwards, and London’s leading index was trading down 0.25% at 7,712 at the time of writing.

The FTSE 100 touched lows of 7,674 earlier in the session.

The skittish nature of UK stocks in the aftermath of the decision to keep rates on hold after 14 consecutive hikes reflects division in the Bank of England and the mixed picture of the UK economy.

“There were a lot of moving parts for the Bank of England (BoE) to contend with going into today’s decision. But, with yesterday’s core print still three times higher than the BoE’s target and wage growth remaining strong, the BoE clearly want to stamp inflation into the ground for good,” said Giles Coghlan, Chief Market Analyst consulting for HYCM.

“However, there is a risk that the ‘lag effect’ on interest rate hikes means that today’s decision may not be felt for another 9 to 12 months. As such, with economic growth already faltering and core inflation remaining high, today’s hike runs the risk of overtightening the economy and inducing a period of stagflation further down the line.”

As an ultra interest rate sensitive sector, Housebuilders were among the top risers on Thursday and built on yesterday’s gains. Taylor Wimpey was 1.6% higher, and Barratt Developments had gained 1.8% at the time of writing. Both were well off session highs.

While keeping rates steady at 5.25% is good for housebuilders and the UK property market, there is the question of what the Bank of England knows about the health of the UK economy that we don’t.

For the BoE to hold off hiking rates while inflation rates are still at 6.7% suggests they see a weakening in the UK economy, which would warrant keeping rates on hold.

With the Bank of England and Federal Reserve both keeping rates on hold in the last 24 hours, attention will very quickly shift to growth rates and what they mean for company earnings.

JD Sports & Next

Insight into the health of UK consumers was provided by Next and JD Sports on Thursday, who both reported positive first-half trading. The two were the FTSE 100’s top risers, with Next gaining 3.2% and JD Sports surging 6%.

Next increased their profit guidance for the year while JD Sports reported strong organic growth.

JD Sports is a fantastic example of a British company dominating its domestic market and replicating this success through overseas expansion.

Shares in the sports fashion retailer were 6% higher in early trade on Thursday after announcing robust organic growth mainly driven by growth in North America, Europe and Asia.

“We have delivered a strong first half to our financial period with organic sales growth of 12% and profit on track for the full year,” said Régis Schultz, Chief Executive Officer of JD Sports Fashion.

“In line with our strategic plan, growth is being driven by our premium Sports Fashion business with an impressive performance in Europe (+27%) and North America (+15%), supported by a strong performance in our more mature UK market (+8%). This performance continued in the important back to school period.”

Investors will be pleased with progress in North America which represents a substantial growth opportunity for the company. However, the most exciting source of growth was Europe and Asia Pacific where JD recorded organic growth of 26.9% and 25.6% respectively.

UK revenue grew 7% to £1.2bn.

“It’s a tough place for consumer-facing companies given the uncertain macro backdrop. Consumer confidence remains fragile even though there are signs of a slowdown in the rate of inflation,” said Russ Mould, investment director at AJ Bell.

“Selling trainers and tracksuits can be big business and many people aspire to own the latest products. That said, these items aren’t cheap and so just because someone wants something doesn’t mean they can always afford it. JD Sports is aware of this situation and rightfully doesn’t assume its goods will continue to fly off the shelf at pace.

“While it is good practice to be cautious, JD Sports’ results still show a business in good health. Sales, profits and dividends are all up, it is investing in the business to support geographic growth, and it is finding new ways to keep customers happy and on its side.

“That includes a loyalty scheme trial in the UK for 10 stores in Manchester which involves customers collecting a virtual JD currency that can be used towards future purchases. These initiatives can be easy wins for retailers.”

Cost-of-living crisis? What cost-of-living crisis? This is certainly the impression Next’s half-year report gave on Thursday.

Next shares were 2% higher in early trading on Thursday after the high-street bellwether said profit before tax rose 4.8% to £420m in the first half.

Shaking off any concerns about the health of the consumer, Next also increased its full-year profit before tax guidance increased from £845m to £875m. This constitutes a 0.5% increase on the last full year.

“Next has pulled another rabbit out of the hat today, leading to a further upgrade to its full-year sales and profit guidance,” said Charlie Huggins, fund manager at Wealth Club.

“UK consumer spending appears to have defied gravity. A strong employment market and rising wages have helped cushion inflationary cost pressures, meaning consumers have continued to spend, despite the gloomy economic headlines.

“Not all retailers have benefited, as the travails of Wilko show. Next has capitalised by doing the simple things well. Once again its operational execution continues to outshine almost all of its competitors.”

Although Next’s increased sales will play a major part in meeting its full-year profit guidance, the company has successfully reduced costs and streamlined its online business which will help the bottom line through the rest of the year.

“If you have an idea of the challenges on the horizon, it’s possible to put your business in the right shape to survive. That seems to be Next’s approach, as it has benefited from focusing on key cogs in the business to navigate the difficult market environment,” said Russ Mould, investment director at AJ Bell.

“Broadening its product offering, making sure the online service is as efficient as possible and keeping a sharp eye on costs have all been key focal points and Next has come out on top. These factors and steady demand from customers have enabled it to raise profit expectations.”