AMTE Power needs more cash; shares crash
AMTE Power, one of the only companies in the UK making lithium battery fuel cells, needs to raise more cash and will do so within the next four weeks.
AMTE Power shares were down 65% at the time of writing.
Today’s call for more cash follows other fundraisings earlier this year. AMTE Power agreed to a £580,000 loan from Highlands and Islands Enterprise in March.
AMTE Power has a £4 million convertible loan note facility with Arena Investors with £3,750,000 outstanding for conversion. Arena last converted £25,000 in April.
AMTE Power burnt through £3,363,332 in operating cash flow in the six months to 31st December 2022.
ASOS shares jump on return to profit
Investors looked past falling sales at ASOS on Thursday and chose to hone in on successful cost-cutting and the return to profit in the three months to 31st May.
ASOS shares were over 13% higher at the time of writing on Thursday after reporting adjusted earnings before interest and tax (EBIT) increased more than £20m year-on-year.
The online retailer achieved higher profitability by cutting costs across the business, which involved clearing out existing stock and buying less.
Cost cuts were essential for profitability, and the degree of the cuts is highlighted by reported revenue for the period falling 11%. A return to physical shops after the pandemic and a general slowdown in consumer spending has knocked sales.
Investors will also be encouraged by the group’s comprehensive action plan to drive higher profits in the future, which involves strengthening their personnel, improving the customer journey, and ‘right-sizing’ stock.
ASOS have set out four pillars in their ‘Driving Change’ agenda:
- 1. Renewed commercial model;
- 2. Stronger order economics and lighter cost profile;
- 3. Robust and flexible balance sheet;
- 4. Reinforced leadership & culture
ASOS is now targeting £40-60m EBIT in H2 2023.
José Antonio Ramos Calamonte, Chief Executive Officer, commented on recent performance:
“I am confident in the direction we are going, we have restored profitability in the period and made good progress in clearing through our inventory to generate cash. We retain ample balance sheet flexibility and reiterate our expectations for improved profitability, cash generation and reduction in net debt in H2 FY23 and beyond.”
ASOS shares were 13% higher at 370p at the time of writing.
Federal Reserve pauses interest rate hikes, stocks dump on hawkish outlook
The Federal Reserve has decided against raising interest rates again breaking a 15-month run in rate hikes.
However, the trajectory of future interest rate changes indicated by individual members’ predictions suggests the Federal Reserve will hike rates twice again this year.
The median forecast of US rates is a rise to 5.6% before the end of 2023, up from 5.1% the last time the Fed met.
The hawkish shift in the rates forecast saw US stocks dump with the S&P 500 trading down 0.59% to 4,343 at the time of writing.
“Investors had expected policymakers to keep rates on hold, but the more hawkish tone came as some surprise, with two extra hikes pencilled in by half of the officials sitting on the committee,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown
“There are three outlier views suggesting an even tougher stance might be needed to take down inflation closer to target.”
Marks Electrical continues share gain
Consumer appliances retailer Marks Electrical (LON: MRK) reported maintained pre-tax profit for last year despite higher costs and the overall weakness of the economy. It is gaining market share and the brand is becoming more widely known.
In the year to March 2023, revenues improved from £97.8m to £112.4m, while underlying pre-tax profit was flat at £6.4m. Gross margins edged down.
Overheads were higher partly due to the lack of Covid business rate relief, building up capacity and the costs of being quoted. Bringing installations in-house also affected operating margins. Advertising and marketing costs were maintained at 5% of revenues.
There was a sharp improvement in cash. Improved credit terms with suppliers helped to reduce working capital. Net cash rose from £3.9m to £10m. The total dividend is 0.96p a share.
The underlying market declined by 10% in the past year. That enabled Marks Electrical to increase its domestic appliances market share from 2% to 2.5% and raise its share of the consumer electronics market, which it entered more recently, from 0.4% to 0.6%. Marks Electrical is increasingly well known outside of its East Midlands base.
Free next day deliveries for purchases over £500 and installation services are helping to win customers.
Revenues are growing at 30% in the first two months of this financial year. Canaccord Genuity forecasts a 2023-24 pre-tax profit of £7.1m, based on a 15% increase in revenues, which were edged up after the results. The broker believes that there is potential for upgrades alter in the year.
The share price improved by 2.75% to 93.5p. the prospective multiple is 18. Economies of scale will help profit to grow. There is potential for a faster rate of growth when the economy is in better shape.
FTSE 100 gains ahead of Federal Reserve interest rate decision
The FTSE 100 was higher on Wednesday ahead of the Federal Reserve interest rate decision due later this evening. The Federal Reserve is expected to skip a rate hike for the first time since early 2022.
Softer US inflation data yesterday and the prospect of the Fed holding rates at current levels were helping lift sentiment.
The UK also received a boost from news the UK economy will avoid a recession after growing 0.2%.
“Investors have a checklist of things to worry about, with interest rates, inflation and economic growth front and centre. Today, they get an update on all three,” said Russ Mould, investment director at AJ Bell.
“The UK economy has returned to growth with a 0.2% rise in GDP, showing the country is more resilient than predictions at the start of the year. While in relative terms it is not shooting out the lights, some form of growth is better than nothing given the current uncertain backdrop.”
The FTSE 100 was 0.5% higher at 7,633 at the time of writing.
FTSE 100 movers
For a second day running, Antofagasta was the FTSE 100’s top riser. The copper miner was over 4% higher at the time of writing on Wednesday.
Hopes of further Chinese stimulus were driving commodities and miners higher after the Chinese cut short-term borrowing costs earlier this week.
We highlighted Antofagasta as one of our stocks for June on Monday.
Miners Anglo American, Glencore and Rio Tino were all higher on Wednesday.
Entain was the FTSE 100 biggest faller after raising £600m to fund the acquisition of STS Holding. STS is Poland’s leading gambling operator.
AIM movers: Aptamer Alzheimer’s test success and GCM Resources discount
The Aptamer (LON: APTA) share price has nearly trebled to 26.5p on the back of a successful development of a lateral flow test to diagnose early Alzheimer’s disease. This was developed in collaboration with Neuro-Bio using Optimer binders. The share price is back to around the level it was last month before Aptamer said that deals are slow in converting and it will require more cash.
More good news from Barkby (LON: BARK) investee company Cambridge Sleep Sciences, which has signed a new licence agreement with Bowers & Wilkins, a subsidiary of Masimo. This will enable the SleepEngine technology to be delivered through the partner’s audio products. This follows the five-year licence to Sleep Sense International, which will use the SleepEngine platform to manufacture a Smart Pillow. SleepEngine is an audio product that retrains the brain to restore healthy sleep patterns. The Barkby
Challenger Energy (LON: CEG) says that it expects to be awarded a new onshore licence in Trinidad. This covers a block that surrounds Challenger Energy’s producing Goudron field. The block is also highly prospective, as well as having existing non-producing wells. The Trinidad operations can finance themself and potentially provide cash for the core Uruguay exploration operations.
Ceres Power (LON: CWR) shares have risen 7.68% to 329.3p ahead of the fuel cell technology developer’s planned move to a premium listing later this month.
Shares in GCM Resources (LON: GCM) slumped 34.7% to 2.775p on the back of a heavily discounted placing raising £500,000 at 2.5p. The discount looks high because of a spike in the share over the past month. At the beginning of June, the price was 2.9p. Further cash will be required later in the year.
Nigeria-focused oil and gas company San Leon Energy (LON: SLE) is continuing discussions on a refinancing, but they are not making the progress expected. There are $10.5m of unpaid creditors. The 2022 accounts will not be published by the end of June and trading in the shares will be suspended on 3 July. The share price slide continues with a further decline of 28.8% to 16.025p. The share price has more than halved so far this year.
Video games developer Frontier Developments (LON: FDEV) expects full year revenues to fall. It is stopping buying third party titles, due to increased competition, and concentrating on its own games. The share price slipped 10.2% to 523.5p.
M&C Saatchi (LON: SAA) says that trading has been challenging so far in the first half. This has particularly hit the advertising part of the marketing services group. A small like-for-like decline in revenues is anticipated for 2023 – they were £462.5m in 2022. Profit is likely to be second half weighted. The share price fell 8.79% to 158.25p.
Tekcapital shares rise after Guident secures autonomous vehicle technology patent
Tekcapital shares have reacted positively to news their portfolio company Guident has secured a new patent for their autonomous vehicle technology.
The “Systems and Methods for Remote Monitoring of a Vehicle, Robot or Drone” patent adds to Guident’s robust suite of intellectual property focused on autonomous vehicle (AV) safety.
Guident’s technology predicts, detects, and reports incidents to a Remote Monitor and Control Center, as well as provides assistance to vehicle passengers.
Guident’s Remote Monitor and Control Center enables AI and human intervention in autonomous vehicles – an integral element of AV safety.
“We are thrilled to unveil this remarkable addition to our intellectual property portfolio. This patent not only represents our commitment to passenger safety and assistance services but also signifies a significant leap forward in efficient autonomous vehicle fleet operations,” stated Dr. Gabriel Castaneda, Guident’s Vice President for AI and Research.
Tekcapital shares were over 3% higher following the announcement.
Invest in the future of e-bikes: Become a co-owner of WATT Mobility
Sponsored by WATT Mobility
WATT Mobility, a rising star in the e-bike industry, is actively pursuing growth capital to fuel its expansion into the European market. The company has initiated a public investment round, opening up the opportunity for private investors to participate alongside large investment funds.
With an impressive commitment of €450,000 already secured at Seedrs.com, WATT Mobility is poised for success. Notably, the company had previously secured a €1.5 million investment from Bloomit, a renowned mobility accelerator and investment fund, late last year. This injection of funds allowed WATT to solidify its market position.
Now, with eyes set on further European expansion, WATT is actively seeking additional capital. Bloomit remains a loyal investor, joining forces with the early founders and existing investors to contribute to this new investment round. Significantly, individual investors now have the opportunity to participate on equal terms with Bloomit and the founders, enhancing the inclusivity of the investment opportunity.
Our Vision: Own the City
WATT Mobility’s vision revolves around the evolving landscape of cities. With increasing restrictions on accessibility by car and a warm welcome for cyclists, urban environments are undergoing a transformation. WATT embraces this change and aims to empower individuals to “Own the City” through its innovative e-bikes.
Offering a clean, healthy, and efficient means of transportation, WATT e-bikes enable users to navigate through the city with ease and enjoyment. Whether it’s commuting to work, meeting friends, or simply exploring, WATT’s electric bikes provide a convenient and environmentally friendly solution, freeing individuals from the hassles of rush-hour traffic and parking woes.
Growth Ambition
Founded in 2018, WATT Mobility’s initial goal was to create stylish electric city bikes that seamlessly blend in with regular bikes. The company recognizes the growing e-bike market, driven by political engagement, environmental consciousness, and urbanization trends not only in the Netherlands but across Europe.
Now, WATT aims to expand its presence internationally and set a funding goal of €600,000. This ambitious target aims to sell 20,000 bikes by 2027, with a strategic focus on online sales and partnerships with 800 resellers and service points throughout Europe. This expansion plan would significantly increase the number of local bike shops embracing the WATT brand, facilitating wider accessibility and brand recognition.
A Unique Business Model
While several dominant brands in the e-bike market primarily adopt direct-to-consumer (D2C) business models to maximize margins, WATT Mobility stands out with its innovative and customer-centric approach. Prioritizing the needs of resellers, WATT implements an omnichannel strategy that ensures both rapid growth and reliable after-sales support. By providing an excellent price-quality ratio and comprehensive after-service, WATT differentiates itself from competitors.
Frans Nomden, Founder and CEO of WATT Mobility, emphasizes the sustainability of their business model, stating, “Unlike companies relying solely on online models, WATT’s approach ensures financial stability for repairs, parts availability, inventory management, and quality assurance. Our objective is to sell over 20,000 bikes by 2027 through 800 resellers across Europe, complemented by our webshop.”
Innovative Bike Designs
Inspired by the fixie-style bikes popularized in New York, WATT Mobility was founded in 2017 by Frans Nomden and Marc Jacobs. The company set out to create electric bikes that seamlessly integrate the battery and motor into the frame, resulting in a sleek and minimalist design. WATT’s e-bikes cater to urban dwellers who prioritize cycling as a means of transportation, embodying a conscious and healthy lifestyle while enjoying the benefits of electric biking. With lightweight aluminum frames, slim tires, and thoughtfully integrated batteries, WATT e-bikes offer an optimal balance of style, performance, and practicality.
Become co-owner
In this era sustainability and innovation are at the forefront of our collective consciousness, WATT Mobility is leading the change with its groundbreaking electric bikes. As the demand for eco-friendly transportation solutions continues to soar, WATT Mobility presents a unique investment opportunity that allows you to not only support a game-changing company but also become a co-owner of this visionary brand.
WATT Mobility has recently launched a crowdfunding campaign on Seedrs.com, an acclaimed investment platform that empowers individuals to contribute directly to promising ventures. With a focus on revolutionizing urban mobility, WATT Mobility has already attracted significant interest, with 75% of the investment target already achieved. This remarkable level of enthusiasm showcases the growing recognition of the company’s potential and the eagerness of investors to be part of this transformative journey.
By investing in WATT Mobility, you become more than just a financial contributor. WATT Mobility invites investors to become brand ambassadors. This unique proposition allows you to personally experience the products you support. For investors who contribute more than 2,500 euros, an exclusive incentive awaits: a discount on the purchase of a WATT e-bike. This means that you not only reap financial benefits but also get to enjoy the cutting-edge products firsthand.
For those seeking an even more rewarding experience, investing more than 10,000 euros offers an exclusive perk: a complimentary WATT e-bike of your choice. This enticing offer exemplifies WATT’s commitment to building a community of engaged and enthusiastic investors and users who collectively share and promote the vision of WATT Mobility.
Don’t miss out on this extraordinary opportunity to join the e-mobility revolution and become a co-owner of WATT Mobility. The investment landscape is rapidly evolving, and the chance to participate in such a groundbreaking enterprise may not come around again. With 75% of the investment already secured, act now to secure your stake in WATT Mobility’s future success.
