This morning THG (LON:THG) has announced that in its efforts to simplify and streamline its operations, together with reviewing its loss-making categories and territories, it has sold off its THG OnDemand subsidiary to its existing management team.

It has also sold its specialist cycling equipment provider ‘ProBikeKit’ to the Frasers Group.

The disposals raised a total of some £4m.

The group has stated that in 2022 the discontinued categories contributed to EBITDA losses of £14.6m.

CEO Matt Moulding stated that:

“Through the years, our incubator division OnDemand has cultivated our talent, technology and trading strategies. I am delighted to see management and Gordon Brothers continuing the fantastic work of the OnDemand team, and I have no doubt the ProBikeKit business will continue to thrive under Frasers Group.”

The group’s shares have been a firmer counter in the last week, touching 108.11p on Thursday.

This morning they hit 110.23p before easing back to 104.30p.

AMTE Power shares were down heavily on Thursday after announcing their financial position was ‘becoming ever more critical’.

The battery manufacturer said if a financing option was not found within the next few business days administration was a real possibility.

AMTE Power was down around 50% at the time of writing.

The company said it is engaged in discussions around funding options, but there is no certainty they will provide the outcome desperately needed by shareholders.

AMTE Power says should the discussions fail, the prospect of any recovery of value for shareholders is remote.

The FTSE 100 made healthy gains on Thursday as investors focused their buying on cyclical sectors, including housebuilders and miners.

Yesterday’s UK inflation data unleashed a wave of buying of UK property stocks, spilling over into a second session. Miners joined the action on Thursday, with Anglo American and Antofagasta topping the FTSE 100’s gainers list.

“After yesterday’s spectacular session for UK stocks, it was refreshing to see further gains on Thursday. The FTSE 100 nudged up 0.6% to 7,632 thanks to strength among miners, and investors continue to shop for bargains among the housebuilders. However, market sentiment can turn quickly and investors have a habit of finding things to worry about,” says Danni Hewson, head of financial analysis at AJ Bell.

“The corporate reporting season went into overdrive with updates from a multitude of players large and small across the UK, mainland Europe and the US. So far, there have been mixed messages, particularly from the tech sector, and pre-market indicative prices suggest the US market will open in the red later today.”

On Thursday, Netflix and Tesla were among technology shares set for a lower open.

“It seems Tesla and Elon Musk are not done with price cuts. For now, the company’s industry-leading margins are holding up better than feared, however guidance for further reductions and the prospect of factory downtime affecting production has led a share price which has been motoring all year to splutter a little,” Hewson said.

“Tesla is still in an enviable position in the electric vehicle market which is why so many investors are along for the journey even if there may be some bumps in the road in the short term.” 

Netflix shares were lower after reporting lower than expected revenue despite attracting 5.9 million more subscribers due to a crackdown on password sharing.

Short-lived respite?

The investor worries Hewson mentioned may be channelled back into food prices as quickly as they were alleviated after yesterday’s inflation data.

Russia has attacked Ukrainian grain stores after their agreement to safeguard grain exports expired. The attacks sent grain futures sharply higher, which could translate to higher food costs globally.

“Just as painful food inflation was beginning to ease, Russian attacks on grain storage facilities in Ukraine risk causing another spike in costs of staple ingredients,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“Wheat futures have jumped after missiles were fired at infrastructure, following Moscow’s decision to leave the Black Sea Grain deal. Hopes that a fast deal to revive the pact could materialize are dissipating, with Russia’s position appearing more intractable after it said that any ships heading Ukrainian ports will be considered carriers of military cargo and attacked.”

The conflict in Ukraine exacerbated the cost of living crisis and now threatens to pile the pressure back on households just as conditions started to ease.

There was little reaction to developments in Ukraine in UK stocks on Thursday. This could change quickly.

Babcock International (LON: BAB) increased its full year revenues by 10% and sharply improved its margins. There are still plenty of exceptionals and provisions in the figures of the marine and aerospace company, though, but the share price jumped 9.6% to 346p, which is the highest it has been for nearly one year.  

The disposal programme has been completed and more than two-thirds of ongoing revenues are in the defence sector. The contract backlog is worth £9.5bn. Of that, £2.8bn is due to be delivered this year and another £700m of framework business also expected.  

In the year to March 2023, revenues improved from £4.1bn to £4.44bn. Underlying operating profit declined from £237.7m to £177.9m, which includes a £100m provision for the loss on the construction of Type 31 navy ships.

Net debt was reduced from £557m to £346m over the 12 months to March 2023, helped by £159m of disposal proceeds. There is no dividend. There could be a return to dividend payments this year.

Babcock International believes that it can achieve average underlying operating profit cash conversion of 80% over the next three years. Revenues should grow in mid-single digits and margins improve.

First quarter trading is in line with expectations and Peel Hunt is maintaining its 2023-24 pre-tax profit estimate at £250m. The forecast earnings multiple is less then ten.

Premier African Minerals shares sank in early trade on Thursday after announcing its cash position was becoming ‘constrained’ amid an ongoing dispute with their lithium offtake partner.

The Premier African Minerals share price was down around 30% in very early trade on Thursday before rebounding.

Premier African Minerals received a termination notice from their Chinese offtake partner Canmax Technologies in June after failing to meet production targets at the Zulu Lithium project. Premier African Minerals claims Force Majeure due to the fault of production failings lying with their mine construction contractor.

Canmax wrote to Premier African Minerals on the 17th July, formalising a dispute noting both parties are required to engage in “friendly negotiation”. Should an agreement not be reached within 10 days, the matter will be taken to arbitration in Singapore.

Canmax made a $34.6m prepayment for lithium offtake to Premier African Minerals, which is required to be returned after Premier African Minerals missed production deadlines. Premier is claiming a state of Force Majeure which they feel suspends the requirement to return the prepayment.

Work is continuing at Zulu with the installation of UV sorters, a new frame for the EDS mill and the Hydro Sizer. The works are expected to increase production efficiency at the project.

Although production has been delayed, Premier African Minerals said initial production projections are still achievable.

In light of the request to return the repayment amount, Premier African Minerals are pursuing an alternative funding agreement but offers no guarantee alternative funding will be achieved. The company said cash reserves are constrained.

Premier African Minerals CEO, George Roach, did not provide a personal comment alongside today’s announcement.

Premier African Minerals shares were down 16% to 0.42p at 8.42am.