Plant Health Care – Brazil gives first stage approval for its new PREtec product for soybean cultivation, Broker says Buy

Mark Watson-Mitchell
-
3
Plant Health Care – Brazil gives first stage approval for its new PREtec product for soybean cultivation, Broker says Buy

It is only the first stage but it is highly significant that Brazil has now accepted the studies of the efficacy of the Plant Health Care (LON:PHC) PREtec product PHC68949 for use in soybean cultivation.

Earlier than expected the Brazilian Ministry of Agriculture, Livestock and Food Supply (MAPA) the approval is ahead of evaluation by the Brazilian Health Regulatory Agency (ANVISA) and The Brazilian Institute of Environment and Renewable Natural Resources (IBAMA).

The group’s PHC68949 product is for use as a seed treatment for the control of root-lesion nematode (Pratylenchus brachyurus) in soybean.

Field studies have already shown that PHC68949 may provide control of harmful nematodes comparable to the traditional chemical nematicides and superior to current biological products. 

For Plant Health Care Brazil represents a very substantial market.

PHC68949 is a novel technology that amplifies a plant’s natural defence against damaging nematodes, increasing plant health and yield in a variety of crops.

Nematodes are microscopic parasitic worms living in the soil where they feed on plant roots, killing plants and reducing crop yields.

Globally, nematodes have been estimated to cause up to 12.3% of annual crop loss, worth approximately $157bn per year.

For 2022/23, the soybean harvested area in Brazil is forecast to be 42.9m hectares.

It has been reported that the use of nematicides in Brazil has increased 10-fold since 2015, with soybeans accounting for 52% of the use, followed by sugarcane at 23%, with the remainder on corn, cotton, coffee, potatoes and 14 other crops. 

This approval is an important stage in the whole process of gaining regulatory licenses, which could take another year or two to be granted.

CEO Jeff Tweedy stated that: 

“Today’s announcement marks a significant milestone in fulfilling our strategic objectives to launch transformative commercial PREtec products across substantial growth markets such as Brazil.

As the issue of food security continues to grow, and the farming world looks for technological solutions to achieve a sustainable future with better crops delivering higher yields and reducing environmental effects, our PREtec products will help meet global sustainability targets.” 

Analyst Opinion – Cenkos says Buy

John-Marc Bunce at Cenkos Securities rates the group’s shares as a Buy with a Target Price of 37p a share.

He states that this first stage approval came faster than expected.

Bunce considers that full approval could be a much shorter process than has been stated and that it could well come before the end of this year.

That would enable a product launch in 2024.

He also states that the Brazilian market opportunity alone is significant, backing up his predictions of close to break-even this year and with first profits showing up next year.

This morning the group’s shares are up 4% at 10.50p and looking capable of a renewed climb to an early 12p and above.

Marshalls volumes slump

Andrew Hore
-
0
Marshalls volumes slump

Building products manufacturer Marshalls (LON: MSLH) has been hit by a 14% decline in like-for-like revenues in the first four months of the year, even though prices have been increased. Volumes have fallen by one-fifth. Operational gearing means that this has a greater effect on profit.

Peel Hunt has cut its 2023 pre-tax profit forecast by one-fifth to £70m, down from £90.4m in 2022. Cost cutting has helped to reduce the fall in profit.

Because Marley is included this year, but not in the comparatives, overall revenues are 12% ahead after price rises of 8-10%. Like-for-like Marley sales are 6% lower. The loss-making Belgian business has been sold.

Weak housebuilding is hampering the business. Housing volumes are forecast to fall by 17% this year.

The fully listed Marshalls share price slipped 8.8% to 271.8p, which is 13 times prospective earnings. The total dividend is forecast to fall from 15.5p a share to 10.5p a share this year, providing a yield of 3.9%.  

This should prove to be the bottom of the cycle with a recovery in profit to £70m forecast for 2024, helped by further cost cutting.

Direct Line shares fall as motoring claims rise

UK Investor Magazine
-
0
Direct Line shares fall as motoring claims rise

Direct Line can’t seem to catch a break. After suffering surging weather-related claims last year, rising motoring claims are now proving to be a thorn in the side of the insurance group.

Direct Line said increasing motoring claims, especially those for damage, are ‘expected to put pressure on earnings in 2023’.

Shares in the group were over 5% weaker early on Tuesday.

Total group gross premiums rose 9.7% to £805.7m in Q1 2023.

“The road ahead continues to look bumpy for Direct Line. Just as weather-related claims ease back to more normal levels, there’s little in the way of a let-off for the Motor division as damage-related claims tick higher,” said Matt Britzman, equity analyst at Hargreaves Lansdown.

“Add in claims inflation that continues to run at high single-digit levels, and the outlook for insurance profitability gets a little murky. There was positive news on the pricing front, especially in Motor, where planned rate hikes fed through to higher gross premiums. There’ll likely be more pricing action over the year as Direct Line looks to plump up margins in Motor.”

Solvency remained broadly unchanged from the prior year-end level, which meant an unwind of some of the improvement management saw early in the quarter. Along with pressure on earnings, the lack of solvency improvement could mean the dividend is under some pressure this year.”

AIM movers: Capital Metals project financing agreement and Purplebricks cash shock

Andrew Hore
-
0
AIM movers: Capital Metals project financing agreement and Purplebricks cash shock

Mineral sands project developer Capital Metals (LON: CMET) has signed a potential 100% offtake and investment agreement with LB Group, which is the largest manufacturer of titanium dioxide pigments and sponge. LB Group will fully fund the Eastern Minerals project in Sri Lanka up to the estimated cost of $81m in the preliminary economic assessment. After that the joint venture will fund additional costs on a 50/50 basis. The plan is to build up production to 1.65 million tonnes per annum. Most of the due diligence for the deal has already been done. The share price jumped 54.6% to 4.25p, which is back to the level in March although it is off the high for the day.

Echo Energy (LON: ECHO) plans to sell a 65% working interest in Santa Cruz Sur to Selva Maria Oil for £1.725m, including £400,000 worth of shares in Interoil, the operator of the assets. That leaves the oil and gas company with a 5% stake and an option to repurchase a further 5%. This will provide the cash required by Echo Energy for working capital in the short-term and enable funding of the assets. The share price rose 38.5% to 0.045p.

Cyber security company Osirium Technologies (LON: OSI) has reached annualised recurring revenues of £2.04m at the end of March 2023. New customers have been gained in the utilities, chemicals and public sectors. There is a growing awareness about the need for cyber security. The share price recovered 16.7% to 1.75p, but it is still one-third lower than at the start of the year.

Purplebricks (LON: PURP) says that the number of new instructions did not increase in the fourth quarter and that means revenues and EBITDA will be worse than expected in the year to April 2024. The company’s payment processor is withholding a portion of remittances and cash was £9.1m at the end of April 2023, compared with previous expectations of £15m. The formal sale process continues, and management says that it wants to conclude this as soon as possible so the future of the business is clarified. The share price has slumped 63% to 2.025p.

On Friday afternoon, Kromek (LON: KMK) announced that it was raising £7m at 5p a share and could raise up to £1m from an open offer to qualifying shareholders. The company is experiencing the highest ever level of interest in its imaging and biological threat detection technology. The cash will be invested in sales and marketing, development and manufacturing. The share price fell from 6.7p to 5.06p on Friday and it has declined a further 3.16% to 4.9p.

Oil and gas producer San Leon Energy (LON: SLE) is still trying to sell its 11% shareholding in Nigeria-focused oil and gas company Decklar Resources Inc. It has also loaned $5.5m to Decklar, which needs to secure its own funding before the disposal can happen. Decklar has delivered 31,000 barrels of oil to the Edo refinery and 7,500 barrels to the DMCL’s refinery so far this year. The San Leon Energy share price slipped 2.78% to 26.25p.

FTSE AIM catalysts: 5 lithium shares ready to rocket higher Part 1

Charles Archer
-
0
FTSE AIM catalysts: 5 lithium shares ready to rocket higher Part 1

Premier African Minerals (LON:PREM), First Class Metals (LON:FCM), Kodal Minerals (LON:KOD), constitute the first three of five of the best FTSE AIM lithium plays ready to rocket higher on near-term catalysts.

I have been covering the exploratory lithium sector for many years now — and not just the London-listed small caps, but also many of the most promising outfits in North America and the growth stories of Pilbara Minerals and Core Lithium on the ASX.

And what’s becoming clearer is that 2023 is the time of the FTSE AIM small caps. I have covered the following five companies in great detail over the years, and all five are ready for that next catalyst to send the share price to new heights.

1. First Class Metals (LON: FCM)

FCM received the UK Investor Magazine IPO of 2022 award and has released several bullish recent RNSs which has renewed interest in the company. Long-time Premier African Minerals backer, James Goozee, has also invested £300,000 at 16p per share, showing confidence in the company’s long-term prospects.

One of FCM’s latest updates includes the signing of an agreement with Nuinsco Resources Limited regarding the Zigzag lithium project in Ontario. This signing completed the process outlined in the ‘Exclusivity Agreement’ announced on 12 December 2022 for the ‘lithium property earn In.’

Zigzag boasts historic grades at surface up to 1.68% lithium over 7.9m and 0.168% tantalum over 2.54m. Additionally, the claim group covers the historic Tebishogeshik occurrence, as well as other mineralized occurrences. Sampling by Nuinsco returned strongly anomalous lithium, tantalum, and rubidium, peaking at 3.55% Li20 with significant tantalum and rubidium results at 836 ppm Ta₂O5 and 4,003 ppm Rubidium Rb₂2O.

Moreover, the pegmatite hosting the deposit is reported to be 800m in length and 20m thick at the surface, and it is located just 10.5km from Green Technology Metals’ Seymour Project alongside several other producing hard rock lithium properties. The project is also close to nearby current key infrastructure, which will significantly reduce any capex costs.

Furthermore, FCM is pleased to announce that it has received payment in full of the 2022/3 Ontario Junior Exploration Grant ‘OJEP’ for work carried out on the flagship North Hemlo property.

2. Premier African Minerals (LON: PREM)

PREM’s Zulu Lithium Project has achieved a truly remarkable feat within just one year, transforming from a site of undeveloped bush and scrubland to a fully functional pilot plant.

Zulu is considered one of the largest undeveloped lithium reserves globally, and there are several exciting developments in the pipeline, including confirmation of production, first sales, receipt of income, assay results, resource upgrades, and a definitive feasibility study. Furthermore, there are plans to optimize the pilot plant, increase the plant’s output, implement solar energy power plans, and obtain approval for a mining license application for the wider EPO.

Despite minor delays, production is expected to commence shortly, and Premier African Minerals CEO, George Roach, is optimistic about first shipments imminently. However, investors should be aware that the commissioning of a plant often comes with minor issues, and that there is a risk associated with the prepayment interest currently being charged by partner Canmax.

Nevertheless, it is beyond unlikely that Canmax will walk away from Zulu, and long-time investors are excited about the possibility of a buyout or a larger strategic investment from the partner, who already holds a 13% stake in PREM and 50% of offtake rights.

Additionally, the project retains grandfathered rights for selling unprocessed ore, and could benefit from the hundreds of millions of dollars the Chinese are investing in lithium mines and infrastructure in Zimbabwe, which would significantly reduce their capex costs.

3. Kodal Minerals (LON: KOD)

Kodal Minerals has a bright future ahead with its world-class Bougouni Lithium Project in Mali. The project has been the subject of multiple resource upgrades and is comparable to Premier African Minerals’ (PREM) Zulu Lithium Project in Zimbabwe in terms of its size and potential.

KOD has already secured a conditional funding package worth $117.75 million with Hainan Mining and its subsidiary Xinmao Investment Co. The deal will see Hainan invest $100 million into a new joint venture subsidiary Kodal Minerals UK, which will be majority-owned by Hainan, with Kodal managing the mining work.

The funding package covers the $65 million required to bring the proposed Dense Media Separation (DMS) plant into production, leaving $35 million for working capital, further drilling, and increased exploration. Once the DMS plant is online, it will be able to ramp up to 130,000tpa of spodumene concentrate at pace. KOD has a conservative lithium price estimate of $2,080/tonne, which would yield $270 million in revenue every year, with KOD entitled to half of these profits under the JV, or $135 million every year.

KOD’s market cap is currently only £130 million, indicating significant upside potential. With China’s Hainan Mining providing the necessary funding and investment, there is a good chance that KOD will become a lithium money-spinner, assuming the lithium price holds up and there are no major problems between now and production.

The recent announcement that Hainan has received all necessary approvals from the Chinese Government authorities to allow it to complete its funding and investment is a major milestone for KOD. KOD is now focused on completing the reorganization of its subsidiary companies to have all its Mali lithium assets held within Kodal Mining UK (KMUK), including the Bougouni project.

Aquis movers: SulNOx emulsifier development

Andrew Hore
-
12
Aquis movers: SulNOx emulsifier development

SulNOx Group (LON: SNOX) has diversified into the demulsification market through developing a product with Cleaner Fuel Solutions in South Africa. The new product reduces the time taken to separate water and oil from toxic waste oil. The share price jumped 46.7% to 11p. That is a sharp recovery from the low less than two months ago.

Ananda Developments (LON: ANA) says that the highlight of last month was the quality of the cannabis plants grown from second-generation seed genetics. They are better than the plants developed from clones. MRX1 unlicensed medicinal cannabis oil is set to be listed in three medicinal cannabis clinics. The share price improved 11.6% to 0.675p.

KR1 (LON: KR1) had net assets of 61.29p a share at the end of March 2023. The income from digital assets was £583,000 during March. The share price rose 1.32% to 38.5p.

==========

Fallers

Four shareholders owning a 19.4% stake have requisitioned a general meeting at TruSpine Technologies (LON: TSP) on 31 May. They want four directors to be removed: Norman Lott, Nikunj Patel, Annabel Schild and Laurence Strauss. The only director they are not seeking to remove is Timothy Evans. They also want three nominees to be voted onto the board, which includes two of the requisitioners Peter Houghton and Todd Michael Cramer, as well as Anthony Swoboda. The board recommends voting against the resolutions. There are also disputes with the inventor of the company’s main technologies and the requisitioners talk about negotiating a new licence. The share price fell 10.5% to 0.85p.

Cadence Minerals (LON: KDNC) says investee company Hastings Technology Metals has hired GR Engineering Services as engineering, procurement and construction contractor for the Yangibana rare earth project. The overall cost is $210m, which is lower than previously estimated. First concentrate delivery should be in the first quarter of 2025. The share price slipped 0.55% to 9.995p.

AIM movers: Mirriad Microsoft deal

Andrew Hore
-
0
AIM movers: Mirriad Microsoft deal

In-content advertising company Mirriad Advertising (LON: MIRI) is working with Microsoft to integrate its new application programming interface with Microsoft Azure. This is a positive for the technology, but cash is still flowing out of the business. Even so, the share price quadrupled to 4.4p, which is the highest it has been since the beginning of the year. That could make it slightly easier to issue shares, but any share issue would still be heavily dilutive.

Japan Petroleum Exploration is acquiring a 49.9% stake in the Norway-based subsidiary of Longboat Energy (LON: LBE) in return for a cash injection of $16m, plus a finance facility of $100m. There is a further contingent cash payment of $4m linked to an acquisition. If there is a discovery at Velocette then up to $30m more cash could be injected by the new partner. The share price jumped 118% to 20.75p.

Braveheart Investments (LON: BRH) subsidiary Paraytec gained CE Marking for its CX300 rapid cancer and pathogens test instrument. It can be sold to researchers. The tests correlate 100% with PCR tests. The 80%-owned Kirkstall is already getting interest in its QV1200 technology that enables testing of drugs without the use of animals. The Braveheart Investments share price doubled to 14p.

T42 Lot Tracking Solutions (LON: TRAC) shares rose 47.4% to 7p following the announcement that it had secured a strategic partnership with Ashdod port in Israel. This will help to promote tracking products.

==========

Fallers

Solgenics (LON: SGN), formerly known as Ncondezi Energy, intends to leave AIM. Management does not feel that the quotation is effective for such a small company with a lack of liquidity, and it wants to focus on the Tete solar project. A working capital loan has been agreed in principle with directors. The share price slumped 54.8% to 0.26p. This represents a recovery on the initial share price decline after non-exec director Scott Fletcher acquired 31.4 million shares, taking his stake to 27.3%.

Life sciences company Aptamer Group (LON: APTA) says that potential deals are slow in converting into commercial projects and it will require more cash. In the ten months to April 2023, revenues were £1.4m and Liberum has slashed its full year forecast from £5m to £1.8m, down from £4m last year. The monthly cash outflow is £500,000 and costs are being cut. That could cut the cost base to £4.5m. Net debt is expected to be £1m at the end of June 2023 and £2.5m is estimated to be required to be raised to get the company to June 2024. The share price slumped 49% to 13p. The December 2021 flotation price was 117p.

Supercapacitors designer CAP-XX (LON: CPX) has raised £2.5m at 1.3p a share. The share price slumped 48.6% to 1.375p. Anthony Kongats is stepping down as chief executive, although he has subscribed for new shares. A retail offer that could have raised up to £500,000 generated £180,000. The cash will fund product development and marketing.

Graphite technology developer Versarien (LON: VRS) is raising £532,000 at 1.25p. The share price slipped 46.4% to 1.15p following the announcement. The cash will pay for commercialisation of products and fund working capital. More cash will be required and the fall in the share price will not help. A new strategic plan will be published in a few weeks and the mature cutting tools business may be sold.

Strong second half at FIH

Andrew Hore
-
10
Strong second half at FIH

AIM-quoted FIH Group (LON: FIH) had a strong second half and profit will be better than expected in the year to March 2023. WH Ireland has raised its pre-tax profit forecast by 15% to £2.8m

Art and museums logistics services provider Momart continues to trade well thanks to more exhibitions. Momart has a purpose-built facility estimated to be worth more than £20m.

Gosport ferry owner Portsmouth Harbour Company benefited from price increase and a recovery in passenger numbers. Even so, they are still four-fifths of pre-Covid level.

Falkland Island Company recovered some of the fall in profit in the first half and contributed a similar amount to the previous year. The Falkland Islands tourist board forecasts 60,000 cruise passengers in the year to June 2022, compared with 3,155 the previous year.

Net debt is down to £500,000. The share price rose 6.83% to 266p, which is 15 times estimated 2022-23 earnings. This year’s forecast has not been changed and a pre-tax profit estimate of £3.4m.

Housebuilders and banks help lift FTSE 100

UK Investor Magazine
-
0
Housebuilders and banks help lift FTSE 100

The FTSE 100 rose on Friday as investors continued to assess a week of central bank action, major economic data, and the reinvigoration of the US regional bank crisis.

The FTSE 100 was 0.8% higher at the time of writing, shortly after the Non-Farm Payrolls release on Friday.

Widely seen as the globe’s most important single data point, the Non-Farm Payrolls provide deep insight into the health of the US economy.

Friday’s highly anticipated jobs number beat expectations, with 253,000 jobs added in the month of April. An Economist consensus had predicted 185,000 jobs added. The unemployment rate also fell.

While the beater-than-expected number suggests underlying health in the US economy, markets will be mindful that it means the Federal Reserve has no reason to cut rates in the short term.

Although many economists expect a US recession later this year, the US economy is showing little sign of slowing down.

FTSE 100 movers

UK banks and housebuilders were among the top risers on Friday. A rebound in stricken regional US banks PacWest and Western Alliance helped spur a rally in UK banks.

Barclays, HSBC and NatWest were up over 2%, while Lloyds gained 1.6%. UK banks have seen little operational impact during the banking turmoil, which has been limited to a few European institutions and mainly US regional banks.

Housebuilders were again performing strongly after upbeat house price data earlier this week. Taylor Wimpey, Persimmon and Barratt Developments were up between 0.5% and 1.6%. The sector has been heavily sold off, and many will see long-term value in individual names.

Underlining the cyclical nature of today’s rally, miners were higher after being under pressure for the past few weeks.

IAG was higher after reporting a surprise profit in the first quarter.

AIM movers: T42 port deal and Aptamer slow in converting pipeline to revenues

Andrew Hore
-
1
AIM movers: T42 port deal and Aptamer slow in converting pipeline to revenues

T42 IOT Tracking Solutions (LON: TRAC) shares have risen a further 35.9% to 8.25p following yesterday afternoon’s announcement that it had secured a strategic partnership with Ashdod port in Israel. This will help to promote tracking products.

Bushveld Minerals (LON: BMN) plans to refinance debt through a three-year, 6% loan of $27m, a new convertible 12% loan of $13.5m – with a conversion price of 8p – and conversion of $4.5m of the existing loan at 6p a share. There is a supplemental production financing agreement at not more than 0.22% of gross revenues, which reduces by four-fifths at loan maturity. The share price jumped 21.4% to 4.4p.

Corcel (LON: CRCL) is selling a 20% interest in the Mt Weld rare earths project to Extraction Srl, an Italian private company for A$1m. The gain on book value is £475,000. Extraction Srl owns 9.61% of Corcel. Riversgold can still earn 50% of the project by spending A$500,000 over 12 months. The share price is 15.4% ahead at 0.375p.

Sareum (LON: SAR) has gained approval in Australia to conduct phase 1 clinical studies on SDC-1801, a new potential treatment for autoimmune diseases, such as psoriasis. The share price rose 12% to 140p.

Life sciences company Aptamer Group (LON: APTA) says that deals are slow in converting and it will require more cash. In the ten months to April 2023, revenues were £1.4m and Liberum has slashed its full year forecast from £5m to £1.8m, down from £4m last year. The monthly cash outflow is £500,000 and costs are being cut. That could cut the cost base to £4.5m. Net debt is expected to be £1m at the end of June 2023 and £2.5m is estimated to be required to be raised to get the company to June 2024. The share price slumped 51% to 12.5p. The December 2021 flotation price was 117p.

Shares in Solgenics Ltd (LON: SGN) have fallen back even though non-exec director Scott Fletcher has acquired a further 11.9 million shares, taking his stake to 27.3%. Solgenics plans to leave AIM. The share price fell 13.8% to 0.25p.

Clontarf Energy (LON: CLON) has concluded its Bolivia lithium extraction joint venture agreement with NEXT-ChemX and paid $500,000 to the partner and is in the process of issuing 385 million shares to it. The share price is 8% lower at 0.115p.

Full year figures from EQTEC (LON: EQT) were in line with guidance, although the EBITDA loss of €4.9m was at the higher end of the range. Waste-to-energy projects are being progressed, but it is taking a long-time to get to a stage where they are generating income. The share price fell 3.9% to 0.185p.

1...536537538...1,831Page 537 of 1,831