The Harland & Wolff Group Holdings (LON:HARL), which owns the Islandmagee gas storage project in County Antrim in Northern Ireland, has just issued the findings of a report into the development of its important project.

The company believes that the study and the Report’s findings takes it one step further in future-proofing the project and preparing it for the transition from a natural gas to a hydrogen-led economy. 

In due course, it is expected to provide 25% of the UK’s natural gas storage capacity.

The pioneering facility is a low-cost fast cycle operation aimed at providing safe, secure and flexible gas storage that will serve the island of Ireland and mainland UK.

It plans to create up to seven salt caverns, which when fully developed the facility will be capable of storing up to a total of up to 500m cubic metres of gas in Permian salt beds approximately 1,500 metres below Larne Lough.

Storage caverns will be developed in a natural salt structure below the seabed and will enable gas to be delivered, stored and then returned to the UK’s national transmission system.

The Islandmagee facility will support the growing demand for gas-fired power development and renewable energy generation throughout the UK and the Irish Republic.

The project would provide security of supply during peak demand for up to 14 days

Continuation of good group news

The good news keeps on coming from this group.

It recently announced a positive Business Update and Management Outlook for this current year and into 2024.

Its order backlog of over £900m covers contracts over the next seven years, while its new order pipeline is swelling with prospects of over £3.6bn in the next five years.

Apart from owning Islandmagee, the group operates through five markets: commercial, cruise and ferry, defence, energy and renewables and six services: technical services, fabrication and construction, decommissioning, repair and maintenance, in-service support and conversion.

Its Belfast yard is one of Europe’s largest heavy engineering facilities, with deep water access, two of Europe’s largest drydocks, ample quayside and vast fabrication halls. 

The group also has two Scottish-based yards, focused upon work for the renewables, energy and defence sectors.

In addition, it also has a sizeable undercover drydock at Appledore.

Analyst Opinion – looking for trebled sales this year and reduced losses

Analyst Peter Renton at the group’s NOMAD and Joint Broker Cenkos Securities has a Buy recommendation out on the company’s shares.

His estimates for the current year to end December look for a 350% rise in group revenues to £100m but he then goes for a 2024 doubling of that figure to £200m.

On the basis of those figures, he looks for a pre-tax loss this year of £34.1m falling to £20.0m next year.

Conclusion – share price to double

The group’s shares at just 15.5p, up 2% on today’s news, look to be very capable of doubling in price in the next year or so.

Following Part 1 of Top 5 high-risk small-cap FTSE shares to consider in Q2 2023 published last week, Part 2 outlines the cases for Greatland Gold, Premier African Minerals and Avacta.

Of course, this is only a personal view, and not investing advice. The high-risk notice is made for a reason. They’re speculative and volatile but come with the chance of exceptional returns for patient investors.

3. Greatland Gold (LON: GGP)

GGP shares have fallen significantly over the past year, but the gold explorer could be one of the best small-cap opportunities by dint of its 30% ownership of the world-class Havieron Project in Western Australia.

The other 70% is owned by mining titan Newcrest, who also owns the nearby Telfer gold mine and associated processing plant. The plan for some time has been to develop Havieron using Telfer’s infrastructure.

However, a spanner has recently been thrown into the works. Newmont has approached Newcrest with an improved offer $19.5 billion merger offer, which would create the world’s largest gold miner by some margin. Given the cost synergies, the companies’ shared history, and rudderless Newcrest leadership, I think this will now go through.

The implications for GGP are stark — they might be about to be in partnership with the world’s gold titan, though they may also look for a way to buy out the remaining 30% of the $1.2 billion project and also negotiate access to Telfer.

Regardless, a Newmont-Newcrest tie-up could act as a near-term price catalyst.

4. Premier African Minerals (LON: PREM)

PREM has been one of the best FTSE AIM performers in recent years, with its share price rising from lows of 0.02p less than four years ago to over 1p today — yielding a market cap over £220 million.

The Zimbabwe-based miner is the 100% owner of the Zulu Lithium Project, which is widely regarded as one of the largest undeveloped lithium reserves in the world. And it’s just cleared up the last couple of hiccups before production — including a missing reagent and government approval.

CEO George Roach has already noted that ‘with plant commissioning already complete, we are now going through the final stages of process control implementation with the plant designers with first concentrate expected shortly and first shipments now targeted for the end of the month.’

With investor Canmax holding circa 13% of shares and rights to 50% of offtake — and Chinese titans investing heavily in the country — investors are feverishly considering the prospect of a full buyout at a high premium.

If not, first sales could be enough by itself to catalyse the share price higher — though I’d caution that there are nearly always small problems when a plant first switches on.

5. Avacta (LON: AVCT)

Avacta is currently proceeding with clinical trials of its flagship AVA6000 — which it hopes will deliver ‘chemotherapy without the side effects.’

The company recently announced that the first patient of the fifth cohort of the flagship AVA6000 Phase 1a Dose Escalation Study has been dosed with the treatment in the UK — this first in-human phase I trial includes MHRA approval for higher dosages — at a level of 250mg/m2. The idea is to find out the maximum tolerable dose for further clinical trials.

CEO Alastair Smith notes that ‘the recent confirmation of release of active chemotherapy in the tumour tissue and the safety data being generated in the ALS-6000-101 study are providing detailed insights.’

The company has also opened two US Clinical Investigator Sites for AVA6000 Phase 1, one at the Memorial Sloan Kettering Cancer Center and the second at the Fred Hutch Cancer Center. Enrolment for soft tissue sarcoma patients has begun, with trials led by globally renowned oncologists Dr William Tap and Dr Lee Cramer.

Avacta has hinted that phase 1B may be conducted initially across the pond, claiming that stateside is ‘uniquely positioned’ for further research. CDO Neil Bell has highlighted the recent ‘major milestone,’ and plans to ‘build the clinical evidence base for the safety and tolerability of AVA6000.’

Further clinical success could see the share price rocket — and a buyout or US listing — could come at any time.

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.

UK intellectual property investment group Tekcapital has secured additional funding to accelerate growth at their portfolio companies.

Tekcapital raised £2m by way of a placing at 15p per share. The funds will be allocated primarily to the growth of MicroSalt and Guident, with £1m designated to MicroSalt inventory.

“We are pleased to announce this oversubscribed offering to facilitate the further significant progress of our portfolio companies,” said Clifford M. Gross PHD., Executive Chairman of Tekcapital plc.

Tekcapital said MicroSalt were preparing for ‘significant forthcoming orders,’ suggesting the capital is required to build out inventories to meet demand.

MicroSalt has recorded several commercial achievements, including their SaltMe crisps being available in over 2,000 Kroger stores and inking deals with food manufacturers.

Having appointed Zeus Capital as their NOMAD late last year, investors will eagerly await further MicroSalt commercial updates, and this morning’s developments suggest momentum is gathering.

Guident will receive a £500k share of the funding raised to develop their Remote Control Monitoring Centre further and conduct additional testing of their regenerative shock absorbers for clients.

The FTSE 100 added to a consistent week of gains as the index briefly touched 7,900 on Friday following the release of US retail sales data and upbeat US banking earnings.

The FTSE 100 was trading at 7,896 at the time of writing.

Strong results from US banks helped lift sentiment early on Friday, with Citigroup, Wells Fargo and JP Morgan all beating analyst estimates. JP Morgan shares rose over 7%.

However, shortly before the US open, mixed US retail sales data sapped some enthusiasm from investors and again raised questions about the underlying health of the US economy.

“Headline numbers were weaker than expected, coming in 1% down MoM and continuing the recent market theme of softening US data. Excluding autos, gas and the control group, the numbers were stronger than expected, which may cloud the market reaction and potential positioning squaring into the weekend by market participants,” said Ryan Brandham, Head of Global Capital Markets, North America at Validus Risk Management.

In a sign of underlying interest for stocks, the S&P 500 rebounded quickly from a lower open and was closing in on the highest levels since August.

UK banks

The plethora of upbeat earnings results from US banks sparked a rally in FTSE 100 banks on hopes US strength would be evident in the next round of updates from UK counterparts.

Standard Chartered was the FTSE 100’s top riser with a 4% gain. HSBC and Barclays were not far behind, adding 3.8% and 3.2%, respectively.

Barclays shares are now only about 10% away from recovering all losses incurred since the beginning of the SVB saga. Standard Chartered – the heaviest hit FTSE 100 bank during the mini-crisis – needs around a 25% rally.