Potential new lithium project investment

Andrew Hore
-
1
Potential new lithium project investment

Medcaw Investments (LON: MCI) is considering acquiring a company with a lithium project in Southern Ethiopia. This is a change to the original plan for the standard list shell, which was going to acquire a life sciences business.

Abyssinian Metals Ltd (AML) has a 51% stake in the Kenticha lithium caesium tantalum project with the other 49% owned by the Oromia state. The project has a JORC, open-pit, inferred resource of 87.7mt at 0.78% Li2O with upside of up to 51mt. The grade could increase to up to 25%. Three higher grade starter pits have been identified.

Stage one is planned for 80,000tpa of 5.5% spodumene concentrate from a plant due to be commissioned by the end of 2023. A second plant is planned for the end of 2024. By 2025, it is estimated that annualised revenues could be $720m, assuming a sales price of $3,000/t and all in sustaining costs of $750/t.

AML already has a credit facility of $25m. The company has 100% of the marketing rights of production.  

Due diligence will commence, and the two companies will work together to agree a potential offer for 100% of AML. The acquisition will be conditional on at least 51% acceptances.   

Medcaw Investments raised £400,000 at 8p/share prior to trading in the shares being suspended. There was cash of £644,000 at the end of 2022. More cash will be required to finance the acquisition (although that could be via a share swap) and/or bringing the project into production.

Former Alterian boss reversing business into quoted shell

Andrew Hore
-
0
Former Alterian boss reversing business into quoted shell

Standard list shell Electric Guitar (LON: ELEG) has secured a potential reverse takeover candidate. It was seeking digital advertising businesses as part of a strategy to be a consolidator in the sector. The target is 3radical, which is run by one of the founders of marketing software company Alterian, which was quoted on the Main Market for more than one decade before being acquired by SDL International for £68.4m.

The deal places an initial valuation of £3m on 3radical. The published accounts show shareholder funds of £4.93m at the end of March 2023. That includes a deferred tax asset of £1m and an R&D tax asset of £190,000.

This is a company balance sheet so there are also loans of £2.82m and £999,000 equity investment relating to subsidiaries. There are offices in the UK, North America and Asia Pacific. Since the year end, there have been shares issued at 27p each.

David Eldridge was boss of Alterian when it floated in 2000 but left one year before it was taken over in 2011. He formed audience capture and consented data capture company 3radical at the end of 2011. 3radical collates data and gets permission to use it through gamification software called Voco. This provides a personalised experience. The data can include biometric information.

The NSPCC signed up with 3radical as part of a campaign to acquire new supporters and retain the ones it already has. The technology helps to learn what motivates the donors.

Trading in the shares has been suspended at 2.1p, which values the company at £1.2m. At the end of September 2022, there was £659,000 in cash.

If the acquisition goes ahead, Electric Guitar plans to move to AIM once the transaction is completed. The enlarged company would not be big enough to return to the standard list.

FTSE 100 slips after Non-Farm Payrolls miss expectations

UK Investor Magazine
-
0
FTSE 100 slips after Non-Farm Payrolls miss expectations

On Friday, investors were issued a mixed US jobs report in which the headline increase in US jobs missed expectations, and the unemployment rate fell.

The US economy added 209,000 jobs in the month of June compared to an economist consensus of 230,000. The unemployment rate fell to 3.6%, as expected.

The immediate market reaction saw global equities jump and bond yields fall. These moves quickly faded, and US equity futures reversed gains – the cash market started Friday’s session in the red. The S&P 500 was down 0.1% at the time of writing.

The FTSE 100 was underperforming other major European equity indices on Friday, with losses of 0.3% compared to a 0.4% gain in the German DAX.

Interest rate outlook

Today’s jobs report had been highly anticipated as markets clamour for hints of the next move in US interest rates. A softening in the US labour market would warrant a slowdown in rate hikes, whereas continued strength gives the Federal Reserve little choice but to hike rates again to tame inflation and wage growth.

Ryan Brandham, Head of Global Capital Markets, North America at Validus Risk Management, feels that today’s Non-Farm Payrolls are unlikely to stop the Federal Reserve from hiking rates at July’s meeting.

“There is some slight weakness starting to appear in the US labour markets, which could see the USD weaken a touch today and rate hike pricing moderate slightly, but it doesn’t feel like this number alone is enough to derail at hike at the FOMC meeting in July,” Brandham said.

FTSE 100 movers

The FTSE 100 was fairly split between rising and falling stocks on Friday, with 54 of the 100 constituents trading negatively at the time of writing.

The index fell as heavy-weight pharmaceutical and consumer companies AstraZeneca, GSK and Unilever dipped. Eight of the top ten FTSE 100 companies by market cap were down, and just two traded positively.

Ocado was the top riser after Exane BNP raised their price target to 580p and Bernstein cut their price target to 1,350p. Exane BNP has a neutral rating, and Bernstein is overweight Ocado.

AIM movers: Aptamer contracts and Quadrise cash call hits share price

Andrew Hore
-
0
AIM movers: Aptamer contracts and Quadrise cash call hits share price

Aptamer (LON: APTA) has won four contracts worth up to £507,000 over six months. They cover pharmaceuticals. Gene therapy and vaccines clients. Further funding is still needed by the custom affinity binder developer, and this is vital for its future. The share price recovered 23.5% to 5.25p.

Trading in oil and gas producer Caspian Sunrise (LON: CASP) shares has recommenced after it published 2022 accounts. Average product increased by 48% to 2,1700 barrels of oil equivalent/day with revenues reaching $42.9m. There was $18.5m of cash generated, but current liabilities are around $16m. Management plans to bring more deep wells into production. The share price rose 14.7% to 3.9p.

Ocean Harvest Technology (LON: OHT) non-executive director Stephen Walker bought 35,000 shares at 13.6p each, while Terence Butler Holdings acquired 75,000 shares at 14.06p each, taking its stake to 18.6%. Earlier this year, a placing raised £6m, or £4.5m after expenses, at 16p. The company produces ingredients for animal feed using seaweed under the OceanFeed brand name. The share price improved 7.27% to 14.75p.

Market research firm YouGov (LON: YOU) has raised £51.2m at 920p/share to help finance the purchase of the consumer panel business of GfK for €315m. The share price recovered 2.09% to 975p. That cash should enhance earnings by a mid-teens percentage in the first full year. GfK has consumer panels in 16 European countries that cover more than 100,000 households. The EU is forcing GfK to sell this business following the merger with NielsenIQ. In 2022, revenues were €134m and pre-tax profit was €24m.

Quadrise (LON: QED) has launched a placing and open offer to raise up to £2.2m at 1.25p/share. That is less than the maximum sought by the clean energy company. The share price slumped 34.3% to 1.2475p. A bookbuild has commenced for the placing. Quadrise has significant potential in the marine and industrial markets.

Shares in self-storage sites operator Lok’nStore (LON: LOK) rose after its placing was oversubscribed and it raised £20.5m at 765p/share. The share price fell 8.96% to 772p. There is a REX retail offer to existing shareholders that closes on 12 July. Up to £2m will be raised in this offer. This cash will replace debt funding for building new sites because interest rates are increasing.

Vast Resources (LON: VAST) is raising £1.7m at 0.35p because it has not received the cash expected from a parcel of diamonds in the reserve bank in Zimbabwe. The share price declined 8.64% to 0.37p. Vast Resources has missed a debt repayment deadline for $8.4m and it is negotiating with the debt providers. The Baita Plai mine in Romania reached operational breakeven in June.

Continued problems with drilling contractor SOFORI is hampering progress at Helium One Global (LON: HE1) and it assessing options for obtaining a drilling rig for the Tai-C well in Tanzania. Talks with SOFORI are still going on and civil works are readying the site for drilling. The share price is 8.11% lower at 5.1p.

Alba Mineral Resources drops beneath placing price

UK Investor Magazine
-
0
Alba Mineral Resources drops beneath placing price

Alba Mineral Resources shares continued to decline on Friday and dropped beneath yesterday’s placing price.

Yesterday, Alba raised £750,000 by means of a placing at 0.125p. Alba Mineral Resources shares were trading at 0.1175p at the time of writing on Friday.

The company said the funds would be used for continued exploration of the Clogau St David’s Gold Mine in Wales. Earlier this month, Alba announced they had received ecological permits to continue dewatering works at the project and already had a technical team on site conducting preparation work.

Alba Mineral Resources shares have lost 28% of their value over the past year.

Coca-Cola HBC bumps up profit guidance after strong June

UK Investor Magazine
-
0
Coca-Cola HBC bumps up profit guidance after strong June

Coca-Cola HBC, the FTSE 100 strategic bottling partner of Coca-Cola, has raised their profit guidance for the first half of the year after enjoying a strong end to the period.

The company said they had experienced strong top-line growth during the period and now expect organic EBIT growth for 2023 of 9-12%. Previous guidance was for EBIT growth of -3% to +3%.

The group noted particularly strong performance during the month of June as a driver of the upgrade to profit forecasts.

Coca-Cola HBC shares were 4% higher and the FTSE 100’s top riser at the time of writing on Friday.

The company have kept their guidance from 2024 onwards the same. Half-year results are due to be released 9th August.

Shell sees production and earnings falling in Q2

UK Investor Magazine
-
0
Shell sees production and earnings falling in Q2

Shell released their Q2 earnings and production teaser on Friday and signalled lower production and prices are likely to lead to lower earnings in the second quarter.

Shell’s teaser is brief but provides an insight into their production forecasts and where they see earnings heading.

The main takeaways are maintenance across their upstream business will result in lower production while their gas and trading businesses are set for lower earnings.

Shell shares were 0.2% weaker at the time of writing.

“Shell has trailed its second quarter results and the good news is there may be a little less ammunition for advocates of harsher windfall taxes. The bad news is this is because its results are likely to be somewhat less impressive than they have been in recent quarters,” said Russ Mould, investment director at AJ Bell.

“How much the drop in earnings from its natural gas trading operation is a function of what Shell describes as ‘seasonality’ in the market, and how much it is just cyclical weakness linked to a softening economy is an open question. Investors appear to be sitting on their hands rather than coming down on one side or another judging by this morning’s share price reaction.

“The company also expects the numbers to be marred by field maintenance which will limit production. Even considering a record first quarter of the year Shell has fallen behind its US peers and there is a danger a weak showing could undermine it further.”

Shell will release their full Q2 results on 27th July.

Lok’nStore offer to shareholders

Andrew Hore
-
1
Lok’nStore offer to shareholders

Self-storage sites operator Lok’nStore (LON: LOK) has decided to issue shares to raise cash rather to help finance new store openings rather than purely using debt – even though the facility could cover this. A fundraising includes a REX retail offer to existing shareholders that closes on 12 July. Up to £2m will be raised in this offer.

A placing has raised £18m at 765p/share. The market price fell 22p to 848p. Peel Hunt previously forecast net tangible assets of 958p/share at the end of July 2023, rising to 1012.8p/share the following year. The discounted placing price is likely to reduce the figure, but it is still an attractive discount to net assets.

At the end of June, Lok’nStore revealed second half trading was strong and it is on course for a 10.5% increase in revenues during the period. The annual increase is likely to be 6% to £25.6m.

A new store in Peterborough has just opened, following one opened in Bedford earlier in the year, and this will help to boost net assets at the end of July 2023. That helps to partly offset the declines in existing assets due to higher interest rates.

The 2022-23 pre-tax profit is forecast to fall from £11.4m to £9.3m because of the sale of sites last year. Dividends of 19p/share are expected for this year and there should be 2p/share increases each subsequent year.

Prior to the share issue, net debt was forecast at £44.7m at the end of July 2023, rising to £53.6m one year later. That would have been gearing of around 25%, so it would not have been high.

The investment in new sites will show through in the figures in the coming years as they are opened and then build up the customer base. There are already plans to increase space by 37.7%. Interest charges were set to rise.

Intermediaries involved in the REX retail offer are AJ Bell, Hargreaves Lansdown and interactive investor. Other brokers may become involved. The minimum subscription is £50. The offer closes at 8am on 12 July.

This is a good opportunity for existing investors to add to their shareholding at an attractive price.

YouGov buying GfK consumer panel business

Andrew Hore
-
0
YouGov buying GfK consumer panel business

Market research firm YouGov (LON: YOU) has agreed the purchase of the consumer panel business of GfK for €315m. That should enhance earnings by a mid-teens percentage in the first full year.

AIM-quoted YouGov is issuing 5.57 million shares and brokers are book building. A price has not been announced, but the current share price is 955p, down 35p on the day.

The deal takes YouGov into the consumer market. The EU is forcing GfK to sell this business following the merger with NielsenIQ. In 2022, revenues were €134m and pre-tax profit was €24m. In the year to July 2023, YouGov is expected to report revenues of £265.3m and pre-tax profit of £55.6m.

GfK has consumer panels in 16 European countries and cover more than 100,000 households. Average contract length is three years and two-thirds of the revenues are recurring. There should be initial annual cost savings of £4m.  

The plan is to help the acquired business by using the group’s profiling, media consumption and brand data. There are also plans to start consumer panels in the US.

Steve Hatch was announced as chief executive of YouGov in April and he takes over from Stephan Shakespeare on 1 August. He previously worked at Facebook and WPP.

YouGov already has shareholder approval to issue the new shares. The rest of the cost of the acquisition will come from existing cash and debt. Net cash was £41.4m at the end of January 2023 and it will increase by the end of July 2023. Dividends will continue to be steadily raised.

The deal should be completed in the second half of 2023.

AIM movers: i(x) Net Zero Asset boost and Emmerson environmental application referred to

Andrew Hore
-
0
AIM movers: i(x) Net Zero Asset boost and Emmerson environmental application referred to

Cleantech investment company i(x) Net Zero (LON: IX.) says investee company WasteFuel Global has secured a $10m investment from BP. This funding increases the valuation of the i(x) Net Zero stake by 181% to $131.7m. The total value of the company’s portfolio has increased from $63.8m to $148.6m. WasteFuel is developing bio-methanol plants. The share price soared 71.4% to 24p. The February 2022 placing price was 76p.

Petro Matad (LON: MATD) says the Mongolian government has approved the certification of the Block XX exploitation area, which includes the Heron oil discovery, as special purpose land. Discussions are continuing to obtain services for production from the Heron-1 well. The share price jumped 56.4% to 6.1p.

Spirits company Distil (LON: DIS) reported a higher loss last week. A few days later it has reported the latest quarterly figures that show revenues more than trebling to £364,000 even though marketing investment has been cut by 72%. The share price is one-fifth higher at 0.45p.

Byotrol (LON: BYOT) has secured a UK patent for anti-viral properties of enhanced extracts of brown seaweed. The company is considering using the extracts in treatments for viral conditions. The share price rose 5.26% to 2p.

CyanConnode (LON: CYAN) says that 2022-23 revenues were in line with expectations and cash was £4.1m. A loss is forecast before moving into profit this year. In he first quarter of this year, CyanConnode has delivered 291,000 Omnimesh modules for smart meters, compared with 391,000 for 2022-23. The share price increased 4.55% to 14.375p.

Emmerson (LON: EML) has referred the Environmental & Social Impact Assessment (ESIA) for its Khemisset potash project to a ministerial committee in Morocco. The regional authority decided it was unable to approve the ESIA. The use of water is a key factor in the decision. A bankable feasibility study will take six months to complete after environmental approval. Emmerson is expected to move into net debt in 2024. The share price slumped 31.9% to 2.45p.

Airline operator Jet2 (LON: JET2) executive chairman Philip Meeson and major shareholder is stepping down from the board. He will initially become non-executive before a replacement is found. Jet2 returned to profit in the year to March 2023. Canaccord Genuity has increased its 2023-24 pre-tax profit forecast from £423m to £463m. Even so, the share price has fallen 10.3% to 1133.5p.

Abingdon Health (LON: ABDX) says 2022-23 revenues should be £4m, up from £2.8m last year. The diagnostics tests company had £3.2m in the bank at the end of June 2023. The easing of the rate of cash outflow means that this cash should be sufficient for reaching breakeven. The share price is 2.08% lower at 11.75p.

Ex-dividends

Atalaya Mining (LON: ATYM) is paying a final dividend of 3.15p a share and the share price rose 2p to 327p.

Dewhurst (LON: DWHT) is paying an interim dividend of 4.75p a share and the share price slumped 80p to 975p.

MS International (LON: MSI) is paying a final dividend of 13p a share and the share price fell 10p to 572.5p.

Next 15 Group (LON: NFG) is paying a final dividend of 10.1p a share and the share price is 17.5p lower at 701.5p.

Premier Miton (LON: PMI) is paying an interim dividend of 3p a share and the share price slipped 1p to 83p.

Polar Capital (LON: POLR) is paying a final dividend of 32p a share and the share price fell 48.75p to 471.25p.

Robinson (LON: RBN) is paying a final dividend of 3p a share and the share price is unchanged at 92.5p.

Real Estate Investors (LON: RLE) is paying a dividend of 0.63p a share and the share price is 0.25p lower at 30p.

Smart Metering Systems (LON: SMS) is paying a dividend of 7.56p a share and the share price fell 13p to 667p.

Tatton Asset Management (LON: TAM) is paying a final dividend of 10pp a share and the share price was down 14.5p to 451.5p.

Union Jack Oil (LON: UJO) is paying a dividend of 0.3p a share and the share price is 0.25p lower at 27.5p.

1...506507508...1,829Page 507 of 1,829