OptiBiotix Health shares were firmly higher on Wednesday after announcing the development of a new sweetener product.

OptiBiotix has developed a portfolio of patented, zero or low-calorie sweet dietary fibres, called SweetBiotix® which avoids the health concerns associated with sugars and syrups.

OptiBiotix Health shares were around 29% at 9.30am on Wednesday.

The new products will target a sugar substitutes market estimated to be worth $18.8 billion in 2023 and forecast to grow to $24.3 billion by 2028.

The new product will have a broad range of applications including fizzy drinks, snacks, bakery products, dairy products and cereals.

“The development of a unique product concept within an industry is high risk, particularly in the food industry where you are competing in an industry dominated by a small number of large global players with demanding requirements,” said Stephen O’Hara, CEO of OptiBiotix.

“OptiBiotix has looked to overcome these challenges by working closely with partners during the product development process and believes it has created a product portfolio of sweet prebiotic fibres, called SweetBiotix®, which meet a large and growing unmet industry and consumer need. SweetBiotix® are unique in being classified as dietary fibres creating the opportunity to replace unhealthy calorific and cariogenic sugars with healthy fibres in a wide range of food and beverage products or as an ingredient in its own right.”

“With growing industry and consumer health concerns over traditional sugars and sweeteners, the approaching commercialisation of the SweetBiotix® family of products offers shareholders the potential for a significant enhancement in the value of the Company.”

Watkin Jones shares were in free fall on Wednesday after the build-to-rent and student accommodation company said remedial work and slow market conditions would impact earnings.

Watkin Jones shares were down around 36% at the time of writing.

The company announced it may fail to complete targeted forward sales deals by fiscal year-end due to rising interest rates and low market liquidity. Watkin Jones also plans to take a £10 million impairment charge on certain assets given the increased cost of funding and macro-economic backdrop.

With property sales stalled, Watkin Jones said it likely won’t materially improve on its £2 million underlying pre-tax profit recorded in the first half of the year. For fiscal 2024, it forecasts a profit before tax of £15-20 million.

Adding to its woes, Watkin Jones aims to boost provisions for remedial work on legacy properties by £30-35 million, spread over five years. This follows its decision to sign the UK government’s Responsible Actors Scheme to reimburse funds for rectifying safety issues in residential buildings.

Its net cash position is £36 million and the company says its balance sheet will allow for a degree of agility going forward.

London’s leading index did little to inspire investors on Tuesday, with attention firmly fixed on US bank earnings and tomorrow’s UK inflation data.

The FTSE 100 was up 3 points to 7,409 at 14.00 on Tuesday.

“After a decent showing on Wall Street last night, European markets were less enthusiastic with most of the major indices struggling to find direction,” said Danni Hewson, head of financial analysis at AJ Bell.

UK markets will be looking forward to the release of June’s UK inflation reading set for release tomorrow morning. Economists forecast the UK CPI inflation rate to fall to 8.2% in June from 8.7% in May.

There is a divergence in inflation rates in major global economies, and tomorrow’s reading will have implications for FX markets and the FTSE 100.

Ocado

Ocado was the standout FTSE 100 performed on Tuesday as the food retailer and technology company soared 16% after releasing a reasonably upbeat half-year report.

Group revenue grew 9% to £1.4bn as their technology solutions revenue surged 59%. After reporting an EBITDA loss in 2022, Ocado produced £16.6m EBITDA in the first half of 2023. This evidently pleased investors and worried Ocado’s short sellers.

“There are two ways of looking at Ocado’s results. The business has generated a small EBITDA profit versus market forecasts of a loss. Sales are up across all of its divisions and clients are busy opening new fulfilment centres or reaping the benefits of Ocado’s system through improved operational performance. Ocado even believes it could win contracts outside of the grocery sector for its technology,” said Danni Hewson.

“However, a bear would point to ongoing pre-tax losses for the group, continued slow pace in signing up new partners, and pedestrian gains in the total number of active customers for its UK retail operations.

“That life isn’t getting any worse for the company is enough to satisfy the market. Although what matters to most investors is whether Ocado remains a takeover target. Rumours that Amazon wanted to buy the business breathed new life into the share price in recent weeks but the retail giant has remained quiet on the speculation.”

FTSE 100 movers

Housebuilders were among the top risers ahead of tomorrow’s UK inflation data. If inflation falls more than expected, it lessens the need for further interest rate hikes – something housebuilders desperately need.

Persimmon, Taylor Wimpey and Barratt Developments were 4%-5% higher at the time of writing. Expect sharp moves in the sector as the stock market opens tomorrow if UK inflation comes in hotter than expected.

Telecoms stocks were out of favour, with Vodafone and BT slipping over 1%.

Pelatro is facing delays in collecting $1.1 million in outstanding payments from customers in Nepal, Myanmar and Bangladesh. The issues stem from government regulations in those countries requiring approval for payments to foreign companies. Two customers are also disputing $375,000 of the total owed.

Pelatro shares were down around 46% at the time of writing on Tuesday.

The company said the payment delays will impact their working capital but the board remains confident in eventually collecting amounts awaiting government approval.

Investors appear unwilling to hang around and wait for approvals as cash becomes tight for the customer engagement technology firm.

The payment delays, along with routine procedures, prompted Pelatro’s board to review all outstanding payments. The review uncovered unusual payment delays from four customers totaling $1.1 million of Pelatro’s $4.2 million in receivables.

Pelatro remains in discussions with the customers and expects to eventually collect the government-delayed payments. However, Pelatro has no clarity on timing as the payments require individual government approvals.

The company had $700,000 cash on hand at the end of June. Pelatro forecasts collecting $2.6 million from other customers through September. But based on assumptions and forecasts, Pelatro said they likely need external funding in the fourth quarter depending on timing of the outstanding payments.

The mention of external funding has sent investors running for the hills – understandable given the current market conditions.