Osirium Technologies, the UK-based cybersecurity software company, said a 46% jump in their customer base and 96% renewal rate were evidence of a significant year of progress in 2022.
Total revenue rose 31% to £1.92m in 2022, up from £1.47m in 2021. Total bookings rose 86% to £3m.
Osirium said their Privileged Process Automation (PPA) and Privileged Endpoint Management (PEM) offerings were now contributing materially to bookings and will add to sales from the more established Privileged Access Management.
Osirium’s systems allow organisations to automate and enhance their cyber security programmes.
The company said the higher customer base provided the platform for upselling opportunities in the future.
“It has been another year of significant progress for Osirium in which we have achieved record levels in bookings and revenue and further grown our customer base while also taking substantial steps to reach cash breakeven and beyond,” said Stuart McGregor, CEO of Osirium
“We have started the new year with a refocused sales strategy and a partner first sales approach, through which we expect to see increased interest across a wider range of sectors and geographies. As privileged security continues to rise up the agenda of IT professionals globally, we are excited for the future and the continued growth of the business.”
Pathfinder Minerals (LON: PFP) has signed a conditional sale and purchase agreement with Acumen Advisory for the disposal of IM Minerals. This was originally announced earlier this year and the deal includes claims against the Mozambique government. The deal requires shareholder approval. There is an initial £2m payment and a contingent payment of the higher of $24m or 20% of net recoveries from the claim. The share price jumped 16.7% to 0.525p.
Fevertree Drinks (LON: FEVR) reported a 11% rise in full year revenues to £344m. Underlying EBITDA was £39.7m and the guidance for this year is between £36m and £42m. US and European revenues increased, but UK revenues were lower even after raising selling prices. Even so, the share price has recovered 9.83% to 1184p – the highest level this year.
Evgen Pharma (LON: EVG) has announced headline results from the phase Ib pharmacokinetic study with the enteric-coated tablet of SFX-01. This shows delivery of the active ingredient to the intestine, so there should be fewer gastrointestinal side effects. The share price is 7.79% higher at 4.15p.
NAHL Group (LON: NAH) is still in the process of reaping the benefit of its change in strategy, but it appears set for strong cash generation over the next three years as more personal injury business goes through its own law firm. The 2022 pre-tax profit of £600,000 was after profit shared with joint ventures. Net debt is £13.3m and could fall to £10.3m by the end of 2023 and to £6.3m one year later. The share price improved 6.23% to 37.5p. That is the highest it has been since last summer.
Full year results from Anpario (LON: ANP) were in line with forecasts with pre-tax profit falling by more than one-third to £3.7m. Net cash was £13.6m. Raw materials prices are reducing, which should help this year. Peel Hunt has reduced its 2023 earnings forecast by 35% to 11.2p. That will still cover an unchanged total dividend of 10.2p a share. The share price dived 29% to 220p.
Cloud video editing technology developer Blackbird (LON: BIRD) increased annual revenues by 38% to £2.85m. The loss increased to £2.2m. There was still £10m in the bank at the end of 2022. There are £3.43m of contracted revenues with £1.6m to be recognised this year. The share price slumped 24.2% to 8.15p.
Capital equipment supplier Mpac Group (LON: MPAC) reported a fall in pre-tax profit from £8.6m to £3.5m, but this was expected. There are signs that trading is recovering and the order book of £67.2m covers nearly two-thirds of forecast revenues for 2023. Pre-tax profit could recover to £7m this year. Adam Holland will succeed Tony Steels as chief executive. The share price fell 10.7% to 250p.
Shares in oil and gas explorer Longboat Energy (LON: LBE) fell a further 5.56% to 8.5p following yesterday’s 2022 results, which included a write down on four wells. The total loss was £15.5m. The next exploration well is not due until the third quarter. Longboat Energy is seeking acquisitions.
The FTSE 100 was marginally lower on Wednesday as markets braced for the Federal Reserve’s interest rates decision later today.
Contagion from SVB and Credit Suisse appears to be contained which has helped sentiment improve this week.
In addition, bargain hunters are seeing value in FTSE 100 stocks after recent volatility, and their buying pressure will likely continue to provide support for the index.
UK banks were the standout performers as fears about the global banking system abated.
Barclays was up over 3% and NatWest gained more than 2%.
UK CPI
UK CPI unexpectedly rose in February, after months of declines, and raised the prospect of another Bank of England rate hike in the near future.
Higher interest rates will mount pressure on many areas of the economy but will help banking profitability.
Federal Reserve
The Federal Reserve are faced with a difficult decision later today; continue the fight against high level of inflation with a 50 bps rate hike, or accommodate market fears with a 25bps hike, or even no hike at all.
The Federal Reserve is trying carefully engineer a soft landing in the US economy by tightening monetary policy but not causing a recession. Looking to history for a playbook of tightening cycles, this is very difficult to achieve and many expect a recession.
No matter the decision later this evening, one would expect swings in US stocks over night that could spill over into tomorrow’s European session.
Ahead of their proposed IPO this year, Tekcapital portfolio company MicroSalt has issued an operational update and insight into their commerical progress.
Before potentially listing in London this year, MicroSalt have unveiled commercial achievements and summarised their strategic partnerships.
Highlights include the promising signs from the online sales activity in MicroSalt shakers and the ongoing relationship with Kroger.
SaltMe Crisps are stocked in thousands of Kroger stores across the US making the low-sodium products available to millions of health conscious consumers.
Also of note is progress in tests with major food companies. This could lead to significant future revenues.
Earlier this year, MicroSalt launched a media campaign with the National Pancreas Foundation which includes access to approximately 100,000 medical professionals and 170 hospitals.
MicroSalt, a Tekcapital portfolio company, appointed Zeus Capital as their Nomad ahead of a proposed IPO this year.
Despite the recent volatility being largely isolated to US and Swiss banks, the rout in banking stocks was far reaching and UK banks, including NatWest, suffered.
With NatWest shares having given up all of this years gains after a questionable outlook for 2023 in their full year results and external pressures from global banking sector volatility, the company is now at a level that may provide an entry point for investors looking to add the bank to their portfolio.
US & UK Bank valuations
Notwithstanding the sharp drop in banking shares, the valuation of the world’s largest financial institutions have been under the microscope in recent weeks.
The valuation trends of UK banks differ significantly to US banks and much was made of the low price-to-book ratio of some of the US regional banks in the midst of the recent volatility.
In fact, after the US regional banks had lost around 80-90% of their value, their price-to-book valuation was the same as UK banks’ long term average.
For example, First Republic Bank trades around 0.2x book value, even after losing much of its value. Barclays trades at 0.3x book value and hasn’t traded a premium to book value for years.
NatWest, like most FTSE 100 banks, trades at a discount to their book value. This has become normal since the financial crisis but also suggests poor sentiment attached to UK banks. NatWest trades at 0.7x book value; the same as Lloyds, but slightly higher than Barclays.
Nonetheless, compared to their peers, NatWest will be starting to catch the eye of investors seeking a yield and opportunity for capital appreciation.
NatWest Dividend Yield
After years offering a dismal yield, NatWest has slowly become a company that provides a respectable yield to investors. With a 5.4% historical yield, NatWest has the attributes many income investors would look for. A dividend cover of 2.9 means ample space for increased payouts in the future.
With Natwest currently trading around 6.4x historical earnings, the shares don’t appear to look attractive compared to peers. However, Natwest was not as heavily hit during the recent bout of volatility which suggests the market feels the company deserves a premium valuation to peers.
2023 Outlook
Although total income grew 28.3% to £2,877 million in 2022, the outlook for 2023 was punctuated by a predicted peak in net interest margins.
This will curb enthusiasm for banking shares as it will cap earnings potential.
In addition, the fluid state of the UK economy should be a consideration for NatWest shares, despite forecasts from the OBR and Bank of England improving of late.
Natwest’s earnings growth isn’t the main event, rather relative value global banking averages.
Manx Financial (LON: MFX) increased its full year dividend from 24.43p a share to 37.64p a share. Pre-tax profit jumped from £2.2m to £5.2m. Management expects first half lending to be ahead of the same time last year, while provisions should not be higher than the norm. The share price jumped 22.2% to 27.5p.
Promotional retail company SpaceandPeople (LON: SAL) achieved 2022 revenues of £5.5m and momentum has continued into 2023 despite UK rail strikes. The full year results will be announced in early May. The share price rose 12.8% to 75p.
Production has commenced at the ASH-8 onshore Egypt well, where United Oil and Gas (LON: UOG) has a 22% working interest, at a net initial stabilised rate of 656 barrels of oil/day and 0.58 mmscf/day. The share price is 13% higher at 1.3p.
Alliance Pharma (LON: APH) reported a 28% decline in underlying pre-tax profit to £30.3m, but new marketing initiatives and a recovery in China augur well for 2023. There will be higher marketing costs this year and pre-tax profit is expected to bounce back to £37.1m. The focus will be on the current portfolio of consumer and prescription products. Cash generation should help net debt reduce to around £90m. The share price is 1.3% ahead at 58.35p, although it was above 62p earlier in the day.
Waste-to-energy technology developer and operator Eqtec (LON: EQT) is raising £3.5m at 0.22p, with potential for a further £550,000 to be added to the total. The share price dived by 28.1% to 0.205p. The cash will be used on market development centres (MDC), which are used to demonstrate the company’s technology. The first MDC should open in Croatia later this year. This is part of the process to move to a licensing model. There will also be some spending on developing sustainable aviation fuel.
Renalytix (LON: RENX) says the FDA will not complete the process for the marketing authorisation application for kidney disease diagnostic test KidneyIntelX until the second quarter of 2023.The FDA will prepare a reclassification order pending approval. This delay has hit the share price, which is down 13.9% to 77.5p.
Virtual reality technology developer Engage XR (LON: EXR) is dropping its Euronext Growth quotation on 19 April. The share price continues its recent decline with a further 12% drop to 3.4p, which is a new low.
Pressure Technologies (LON: PRES) says Grant Thornton requires additional time to complete the audit of the 2021-22 results, so trading in the shares will be suspended on 3 April. The share price fell 7.23% to 38.5p. Previous accounting policies accounting for defence contracts are deemed not to be compliant with accounting standards. This means that costs will be taken earlier meaning higher profit in future years. The accounting changes will make it easier to return to profit this year. The new finance director will join in May and new banking facilities are being negotiated. The AGM will still be held on 31 March. Richard Staveley, who works with 20% shareholder Harwood Capital, will join the board when after the results are published.
Atlantic Lithium stock is being dragged down by Blue Orca’s anchor. Putting the short-seller in its place could see shares spike rapidly.
As a long-time investor and loyal supporter of Atlantic Lithium (LON: ALL), I was annoyed — but not surprised — by the short-selling attack this month. Combined with the depressed lithium price, the allegations were sufficient to send ALL’s share price careering from 37.7p to just 22.6p, before recovering to 27.35p today.
Assuming that the allegations are baseless — and ALL strenuously denies all charges — there is still time to buy up shares on the dip.
Source: Google
Atlantic Lithium shares: in a nutshell
For the uninitiated, Atlantic Lithium owns rights to a 560 square kilometre tenure across Ghana and a 774 square kilometre tenure across the Ivory Coast. But the Crown Jewel is undeniably its Ghanian Ewoyaa Project, a large lithium pegmatite site which in all likelihood will become West Africa’s first lithium-producing mine.
Ewoyaa is fully funded up to production by billion-dollar US-based Piedmont Lithium to the tune of $102 million. As a strategic investor, Piedmont owns 9.39% of ALL’s shares, and there has been some speculation that it might acquire the remaining shares at some point, which could make strategic sense for both companies.
Encouragingly, some of the most common threats have been de-risked. Preliminary results are promising, the project is well capitalised, and the company’s management is actively involved in getting as much information to investors as possible.
At the start of February, Ewoyaa’s Mineral Resource Estimate (MRE) was increased to 35.3Mt at 1.25% Li2O, with measured and indicated resources now 79% of total resource. This is further evidence that when production is up and running, ALL will be the owner of a world-class lithium reserve — and despite the current lithium price falls, the longer-term supply gap means serious profits could be in the offing.
Short-seller attack
On 8 March, Blue Orca launched a short-seller attack, leading to both the sharp share price drop and a short trading suspension on AIM.
Blue Orca’s primary allegation — and which it continues to allege — is that ‘Atlantic paid and promised tens of millions of dollars in potential royalties to a company secretly owned by the son of a leading politician known as General Mosquito, who previously served in Ghana’s Parliament as Chair of the Mines and Energy Committee.’
This ‘textbook evidence of corruption’ will apparently be a problem, as ‘based on precedents in Ghana and around Africa, including a recent decision by Ghana’s highest court, (Blue Orca) do not believe that authorities in Ghana (including the Parliament) will ratify Atlantic’s mining licenses tainted by corruption.’
There are other details, but this is the key focus: and if Blue Orca is correct, then ALL shares would become essentially worthless.
But unsurprisingly, the FTSE AIM company has refuted its claims in full.
On 9 March — one day later, let’s hope nobody had any important plans — Atlantic issued a passionate defence, stating that Orca’s views were both ‘false and misleading.’ Further it noted that it holds ‘valid Prospecting Licences with operating permits for all of its current activities, in accordance with the Ghanaian government and the Minerals Commission’s requirements, and outrightly refutes the allegations of impropriety made by the Report.’
Further, ALL noted that it believes the ‘Minerals Commission will grant the Mining Licence for the Ewoyaa Lithium Project and Ghana’s Parliament will ratify the Company’s Mining Licence in due course.’
It also intoned that it ‘has a zero-tolerance policy on bribery and corruption and, in all of its activities, operates in accordance with the most stringent levels of corporate governance internationally.’
Addressing Blue Orca directly, Atlantic warned that all allegations are ungrounded, and that it plans to seek legal advice to address the claims made. Further, the company warned investors that the report was ‘clearly intended to benefit Blue Orca Capital, which, in the Report itself, has disclosed that it is short selling and stands to profit.’
Until these claims are completely eradicated from Atlantic Lithium’s reputation, its share price is going to remain depressed. Of course, for those who believe on balance that the short-seller attack is a fabrication, there is a solid opportunity to buy the dip.
Encouragingly, Executive Chairman Neil Herbert and Finance Director Amanda Harsas bought a combined £671,231 of shares on 20 March — at an average price of 27.34p each.
It’s unlikely that they would voluntarily choose to throw money away.
Interim Results
On 15 March, ALL released strong unaudited interim results covering H2 2022.
Financially, the company held a strong cash position of AU$19.1 million at the start of the year, while exploration expenditure on the balance sheet was AU12.7 million net of Piedmont contributions. It’s reasonable to assume that the company has slightly less cash at hand than this as Q1 has progressed.
Operationally in the half, it completed the pre-feasibility study into Ewoyaa, demonstrating ‘the significant profitability potential of this stand-out project.’ The company expects life-of-mine revenue to exceed US$4.84 billion, with a post-tax NPV of US$1.33 billion and an outstanding internal rate of return of 224% over 12.5 years of mine life.
The company now expects to build a 2Mtpa DMS plant with capacity to produce 255,000tpa of lithium spodumene concentrate.
Atlantic was also admitted to the ASX in September, a step with far more importance than most London-focused investors understand. Australia is the home of Pilbara Minerals, Core Lithium, Mineral Resources, and dozens of others lithium success stories — I have covered these ASX stocks extensively, and investors down under are always looking for the next Pilbara.
Herbert considers that ‘Ewoyaa is a low capex, low opex project with a simple processing flowsheet, soon to be producing highly sought-after, coarse grain spodumene concentrate. There are few spodumene projects that boast the existing infrastructure, minimal footprint and short timeline to production that Ewoyaa offers.’
While 50% of the offtake is destined for Piedmont, the other half can be sold on the open market — and given the still elevated price of lithium and its general supply problems, there will be no shortage of suitors. Indeed, there’s a good chance that if Piedmont doesn’t make an all-out bid for the company, it will offer an excellent price in exchange for exclusivity rights over the longer term.
Auger Drilling and where next?
Atlantic Lithium has now commenced drilling at Ewoyaa, and plans to drill circa 20,000m over the next five months both within the project area and the wider portfolio, with 6,500m of follow-up drilling at new targets to be done dependent on results.
Interim CEO Lennard Kolff notes that with ‘a significant MRE infill and extensional programme planned, we are confident of further resource upgrades. Importantly, these will not impact the planned delivery date of the DFS, which will be based on the current MRE.’
The definitive feasibility study should be released by the end of Q2, and the CEO thinks that ‘with the Pre-Feasibility Study delivered, the Mining Licence application submitted, the FEED engineering contract awarded and the funding agreement with our partner Piedmont Lithium in place, the Company is pushing ahead to achieve production and benefit from the ongoing lithium demand expected over the coming years.’
If all goes to plan, the Atlantic Lithium share price should re-rate soon.
Of course, until production starts only volatility can be reliably predicted.
This article has been prepared for information purposes only by Charles Archer. It does not constitute advice, and no party accepts any liability for either accuracy or for investing decisions made using the information provided.
Further, it is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
A resurgent FTSE 100 gained on Tuesday as fears about the implications of the fire sale of Credit Suisse subsided.
Global markets have been engaged in a game of banking crisis ping pong over the past two weeks with the US first showing signs of weakness after SVB failed, Europe joining the saga with the sale of Credit Suisse as First Republic Bank shares collapsed on Monday.
Investors will be hoping we are passed the worst of it. On Tuesday, UK banks signalled we could be.
Barclays and Standard Chartered have suffered dearly as a result of the crisis but exploded higher early on Tuesday. Barclays was 4.6% and Standard Chartered added 3%.
The FTSE 100 is now down 0.6% year-to-date after breaking through to the all-time highs earlier this year.
“Initially sceptical of the deal, the market’s mood changed over the course of yesterday, with UBS shares ending higher after a sharp initial fall,” said Steve Clayton, head of equity funds Hargreaves Lansdown.
“There was no respite for First Republic Bank though, with the Californian lender’s stock almost halving last night. First Republic is seen as vulnerable to the same losses on longer term bond values and liquidity squeeze that brought Silicon Valley Bank down.”
Fed Interest Rate Decision
As fears about the global financial system diminish, attention will shift to tomorrow’s Federal Reserve interest rate decision.
At the beginning of March, it appeared the Fed would hike 50bps. However, after the events of the last two weeks, it is anyone’s guess as to what the actual decision will be.
There is a school of thought that recent developments themselves tighten financial conditions and alleviate the need for another rate hike.
The counterargument is inflation remains elevated and the US economy is sufficiently robust to stomach a rate hike.
For investors seeking an entry to UK equities, the recent banking sector induced volatility may have provided an opportunity.
After breaking to all-time record highs in early 2023, London’s leading index has pulled back significantly and many UK equities trade below recent highs, and offer better value than they did just a few weeks ago.
We highlight two options for a diversified approach to gaining exposure to UK stocks with the Dunedin Income Growth Investment Trust and Temple Bar Investment Trust.
Dunedin Income Growth Investment Trust
According to data from Trustnet, the Dunedin Income Growth Investment Trust has returned 39.1% over the past five year period. This is a significant outperformance of the AIC UK Equity Investment Trust benchmark 17.5% return.
The outperformance has been achieved by an active approach to selection UK and European stocks. The current portfolio is heavily weighted towards UK shares which accounted for 73.7% of the portfolio as of 31/01/2023.
Recent changes to the portfolio include the selling down of Persimmon to replace the stock with Taylor Wimpey in late 2022. The managers of the fund felt Taylor Wimpey’s margins were preferable and was less likely to slash their ordinary dividend.
There is a significant weighting to stocks with bond-proxy attributes of reliable cash flows and attractive dividend yields. Unilever, Diageo and AstraZeneca are top ten holdings.
The Dunedin Income Growth Investment Trust is a solid income choice with a 4.6% yield.
Temple Bar Investment Trust
The Temple Bar Investment Trust is managed by Ian Lance and Nick Purves. Their focus is on value investing and buying companies trading less than their intrinsic value. Current portfolio companies include ITV, BP and Shell.
At the recent UK Investor Magazine Virtual Investment Trust Conference, Ian Lance detailed his empirical research into value vs growth stocks over the past 100 years, and how value beat growth in all but two decades.
One of these decades was the most recent period after the financial crisis and the years of record low interest rates. Despite the allure of growth and multiple expansion during this time, the Temple Bar team were unwavering in their pursuit of value.
Their top ten holdings clearly demonstrates their willingness to buy unloved stocks. Questions about ITV’s core advertising business has presented an opportunity to buy the stock for growth in their studios business. Although BP and Shell shares are up sharply in the past year, they still trade attractively on an earnings basis.
The Temple Bar Investment Trust has a more concentrated approach that peers – the portfolio consists of around 20 holdings.
The inclusion of BP and Shell in the top ten holdings are a material contributors to the trust’s 4% yield.
The UK Investor Magazine was thrilled to welcome Jeff Tweedy, CEO at Plant Health Care, for a deep dive into the food sustainability company.
Plant Health Care has developed a suite of products which help boost crop yields by protecting them against the environment and parasites such as nematodes.
Jeff details products including Harpin aß and Saori exploring the demand dynamics for each product.
We look at Plant Health Care’s pipeline of new products and the new markets Jeff would like to enter in the pursuit of their target to reach $30 million revenue by 2025.
