The FTSE 100 was muted on Friday after a week of company updates and economic data saw London’s leading index range bound.

The FTSE 100 was trading down 6 points at the time of writing, after spending much of the mornings session in positive territory.

“Despite a good showing on Wall Street last night thanks to better-than-expected US GDP figures, Friday was a damp squib for European stocks, with little change on the main indices,” said Russ Mould, investment director at AJ Bell.

Sainsbury’s

Despite the FTSE 100 bereft of direction on Friday, investors were surprised with the approximate £200m purchase of Sainsbury’s shares by wholesaler Bestway.

Merger and acquisition news has been thin on the ground of late and hints the Uk supermarket were once more catching the attention of potential suitors saw Sainsbury’s shares rise, taking Tesco with them.

Sainsbury’s shares were 4% higher while Tesco gained 0.8%.

“Bestway’s purchase of a stake in Sainsbury’s has come out of the blue. While Bestway says it doesn’t intend to make a bid now, there is logic in putting the two companies together, with echoes of how Tesco thrived from buying Bookers,” said Russ Mould.

“As the UK’s largest independent cash and carry business, Bestway’s strategy is to be seen as a place where retailers, caterers and cafes can obtain all the stock they need at a good price.”

“If Sainsbury’s was part of the same group, both sides could benefit. In theory, Bestway could tap into the supermarket’s buying power and obtain stock at a lower price, thus making its proposition more appealing for its customers. Sainsbury’s could expand its reach and have good access to a broader customer base including foodservice and pet shops, while also being able to compete better against Tesco.”

Morrisons was acquired by US private equity in recent years after a bitter takeover battle and speculation about interest in the UK’s other major supermarkets raises its head periodically.

There is not yet any evidence Bestway’s intention is to attempt a full takeover of Sainsbury’s.

Elsewhere, oil majors BP and Shell were supporting the index as oil prices rose and UK-focused stocks put in a respectable performance.

Housebuilders were stronger, as were the UK banks, ahead of the Bank of England’s rate decision next week. Although the BoE is set to raise rates next week, there is a school of thought the UK’s central bank is nearing the end of their hiking cycle, and could even cut rates this year.

This week, Tekcapital have further validated their strategy to develop university technology into businesses that have the potential to help a great number of people after their portfolio company MicroSalt achieved a $20m valuation.

Tekcapital has a 97% stake in MicroSalt and the latest valuation is well in excess of $7m valuation given to MicroSalt through a VC investment in mid-2022.

Tekcapital converted the outstanding convertible loan note in MicroSalt at $2.18 which now values MicroSalt at $20m.

Having appointed Zeus Capital as their AIM NOMAD in December, MicroSalt are gearing up for an IPO in 2023 which will unlock the value created in MicroSalt by Tekcapital.

MicroSalt’s technology reduces sodium in salt by 50% and can help the millions of people suffering from cardiovascular diseases.

There is a proven link between high sodium salt intake and cardiovascular disease which is responsible for the deaths of 17.9 million people each year.

MicroSalt’s products are now available in thousands of Kroger supermarkets in the United States and there is an understanding the company plans to launch their low-sodium salt shakers and crisps in additional markets.

Tekcapital portfolio

Should MicroSalt float this year, it will be the latest in a series of Tekcapital success stories that include Belluscura and Innovative Eyewear.

Tekcapital seek to provide a broader range of investors with access to technology companies at the early stage of their growth cycles through IPOs.

This is notably different approach to keeping companies private for longer and restricting the number of investors able to secure a stake in companies at the stages with potential for significant long term returns.

This has been demonstrated in Belluscura and the IPO at 45p in 2021. Belluscura subsequently provided early investors and IPO participants with share price highs above 130p, before falling back.

Tekcapital have also recently navigated challenging market conditions to secure growth capital for Innovative Eyewear through a NASDAQ listing in August 2022.

Boss Julian Dunkerton believes that his iconic Superdry (LON:SDRY) brand now has real momentum and he was delighted by how the group’s retail trading had continued to strengthen.

However, in the first half year, covering the 26 weeks to 29^th October, the group was let down by the poor performance of its wholesale operations.

The interim results reported a 3.6% increase in group revenue to £287.2m (£277.2m) with the adjusted pre-tax loss coming out at £13.6m (£2.8m loss).

Including the nine weeks to end December the group saw stores revenues rising 14.3% to £117.7m as its customers returned to the high streets, with the group seeing strong demand for its womenswear, denim and jackets.

The wholesale side suffered from the lagged recovery after Covid combined with shipment timing.

The group is known globally for its distinct collections of affordable, premium quality clothing, accessories and footwear. There are 219 physical stores, around 450 franchisees and licensees, with the group selling in over countries across the world.

Boss Julian Dunkerton stated that:

“The Superdry brand has real momentum and I’m delighted by how our retail trading continues to strengthen. We’ve done this against a difficult macroeconomic backdrop by delivering well-designed, affordable, and responsibly sourced products which have resonated well with customers. 

Our coats performed really well in the run up to Christmas, and womenswear continues to be a highlight for us. Stores continued to recover strongly and online had its biggest ever week over Black Friday, helped by our new ecommerce platform which is delivering real benefits.

Despite the underlying brand recovery, our profits in the first half fell short of expectations mainly due to the underperformance of Wholesale.

Whilst we did trade well through November and December, the outlook for the remainder of the year is uncertain and as a result, we are moderating our profit outlook to broadly breakeven. We don’t expect market conditions to become easier any time soon, but with a new financing package in place and the brand in great health, we approach the year ahead with optimism.”

Analyst Wayne Brown at Liberum Capital has reiterated his view that Superdry shares are cheap and offer significant long-term value. 

For the year to end April 2023 he is estimating £604m (£610m) group revenues, with a £5.8m pre-tax loss (£21.9m profit), but with net debt falling by £20m to £198m.

The coming year sees Brown looking for £645m sales, £8.8m profits and earnings of 8.2p per share.

He has a Buy rating on its shares looking for 500p in due course.

The FTSE 100 extended gains on Thursday afternoon after the United States grew more than expected in the 4th quarter and US tech stocks continued to rally. US GDP grew 2.9% on an annualised basis, compared to estimates of 2.6% growth.

US GDP figures released on Thursday provided the cue for investors to buy risk assets on hopes the damaging recession predicted last year may not come to pass.

After the release of US GDP today, attention will quickly shift to tomorrow’s instalment of US personal spending and housing data. These data points will influence the Federal Reserve’s next decision on interest rates due next month. 

The FTSE 100 was gaining 0.3% at the time of writing.

Despite a raft of updates from UK companies, the focus has largely been on the United States this week and UK equities have broadly been ebbing and flowing in line with markets over the pond.

In addition to key economic data, the US tech sector has been a major factor driving sentiment as giants such as Microsoft and Tesla update investors.

Tesla beat earnings expectations overnight and jumped over 10% on Thursday as US trade began.

Diageo

FTSE 100 stalwart Diageo disappointed markets on Thursday and dragged on the index after the alcoholic drinks company said they saw weaker organic growth. Nonetheless, reported net sales in the six months ended 31st December grew 18.4% in a challenging environment.

“It’s glass half empty time for Diageo, which poured out some resilient results showing a surge in super-premium brand drinks, but disappointed in its outlook for the all-important American market,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

“Shares fell as investors eyed up the lack of cheer ahead as Americans tighten their belts amid the downturn. Diageo has been benefiting from ongoing pandemic habits, when people turned to favourite pricier tipples, including the likes of Johnnie Walker and Tanqueray, for lockdown distraction.”

A sharp increase in net asset value (NAV) helped 3i Group shares rally 9% on Thursday. The private equity and infrastructure group enjoyed a 26.8% increase in NAV for the nine months to 31 December 2022.

CLIQ Digital (ETR:CLIQ) sell subscription-based streaming services that bundle movies & series, music, audiobooks, sports and games to consumers globally and are now creating shareholder value through increased revenue.

CLIQ Digital have produced consistent revenue growth since the beginning of 2019 and in the most recent quarter recorded a bumper 91% increase in sales. 

CLIQ shares are up 54% over the past year to €28.50 and analysts see additional upside to their median fair value price target of €70.

The company is due to report next week and results will be closely watched for further progress in their key profitability metrics to support their already attractive valuation.

Established market position 

CLIQ’s success lies in their approach to marketing by sparking the interest of the online consumer in numerous streaming services via a well-designed banner, followed by a membership offer which includes a free trial period. To gain traction in a market with a number of incumbent streaming competitors, CLIQ have taken a more personalised approach to securing memberships.

The strategy has been a two-pronged approach in the targeting of individuals with direct personalised marketing and the creation of services appealing to different groups of media consumers. 

Their approach has gained them 1.8 million paid memberships and €8.3m operating free cash flow.

CLIQ Digital have carved out a niche in the streaming market

CLIQ licences its streaming content from partners across those multiple categories. The company stores, bundles and curates digital content in its digital content warehouse. Within the CLIQ Tech Hub data-driven marketing and business knowledge is combined with the company’s digital content warehouse. This enables CLIQ to create attractive streaming services.

Over the years, CLIQ have become experts in online advertising and currently have 1.8 million paid memberships on numerous streaming services across 30+ countries.

CLIQ’s strong track record in building streaming services has brought it closer to achieving its dream: cliq.de – the company’s most advanced all-in-one streaming service for the mass market, which makes streaming content accessible to everyone in Germany.

CLIQ Digital recognises the power of targeted advertising 

The mass marketing approach is not appropriate for specialised streaming service. This is one of the reasons CLIQ is selling a bundled streaming service which includes movies & series, music, audiobooks, sports and games. The all-in-one streaming service enables CLIQ to target a wide variety of consumers with the streaming content they like. Direct marketing focuses on effective cost per acquisition as opposed to expensive brand building. 

To facilitate their long-term growth ambitions, CLIQ have developed an intricate marketing strategy that focuses on converting customers in a cost-effective manner from online advertising campaigns.

Consistently increasing revenue

CLIQ is debt free and have supported their growth through significant increases in revenue. Sales grew 91% in Q3 2022 compared to the same period a year ago. EBITDA grew 68% over the same period.

The company will report 2022 preliminary results 31^st January. 

Tate & Lyle have combatted rising input prices by increasing their food prices driving which drove group revenue higher by 16% in the three months ended 31st December.

Their Food & Beverage Solutions unit was the standout performer with revenue increasing 19%. Due to the timing of orders earlier this year, the Sucralose unit saw revenue fall 8%, as expected.

Tate & Lyle says they see revenue increasing in the coming year and are confident in maintaining cost discipline. The group says profit will be broadly in line with expectations.

Tate & Lyle shares were 4% higher at 755p at the time of writing.

“Third quarter trading was robust at Tate & Lyle, with double digit revenue growth showing resilient demand in the face of a round of price hikes and broader economic uncertainty. It’s pleasing to see no material growth slowdown in North America, despite ongoing supple chain troubles, and volumes across the Food & Beverage Solutions business look to be holding up despite the higher prices,” said Matt Britzman, Equity Analyst at Hargreaves Lansdown.

We expected a slowdown in sales from the Sucralose division, as Tate pushed orders through the first half of the year – effectively front-loading performance there. The Primient joint venture looks to be benefiting from planned price hikes and we’d expected to see performance continue to improve as we move through the second half and margins recover – it’s good to hear that’s progressing as expected.”