Tekcapital shares 55% undervalued compared to NAV – SP Angel

UK Investor Magazine
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Tekcapital shares 55% undervalued compared to NAV – SP Angel

Following an exciting week of portfolio company updates last week, analysts at SP Angel say Tekcapital’s shares are 55% undervalued compared to their portfolio’s NAV.

SP Angel highlights market conditions and the impact on Tekcapital’s listed portfolio holdings, Innovative Eyewear and Belluscura. Considering the impact of market volatility on Tekcapital’s NAV, SP Angel has worked YTD VWAP prices into Innovative Eyewear and Belluscura NAV and says, “we could expect additional upside in the future.”

Privately held portfolio companies MicroSalt and Guident are valued on third-party valuations and recent funding from Tekcapital.

SP Angel calculates Tekcapital’s NAV to be 31.7p per share, including the recent £2m placing.

SP Angel analysts wrote in a note:

“TEK’s current share price is 15.45p, translating to a market cap of ~£25.5m, ~55% lower than the baseline NAV calculated above. We would also suggest that the current value potential of these portfolio companies, given the additional investment since the last third-party NAV valuation, has increased significantly.”

Tekcapital is set to report full-year results in May.

FTSE 100 flat ahead of a busy week of earnings

UK Investor Magazine
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FTSE 100 flat ahead of a busy week of earnings

The FTSE 100 was broadly flat on Monday as investors prepared for the UK and US earnings seasons to ramp up in the coming days.

The FTSE 100 was trading down by just 2 points at 7,911 at the time of writing.

Analysts suggested today’s slow trade should be enjoyed as several risks persist that have the potential to spark volatility in stocks.

“All said and done, the global macro backdrop remains considerably more uncertain than normal and the tranquillity in equity markets should be enjoyed while it lasts,” said Rupert Thompson, Chief Economist at Kingswood

The first potential market-moving consideration is the increased flow of Q1 UK company trading and earnings updates.

FTSE 100 earnings highlights this week include Associated British Food, Whitbread, Reckitt Benckiser, Unilever, Barclays, Standard Chartered, and NatWest.

Barclays, Standard Chartered and NatWest results will be poured over for any signs of stress from the mini-banking crisis saga.

Major US tech companies will also report earnings this week, with Microsoft, Meta and Amazon set to release Q1 earnings.

“In the US, all eyes are on the big tech names which report earnings throughout the week. Tuesday sees Microsoft, Alphabet and Visa report numbers, with Meta Platforms on Wednesday, and Amazon and Mastercard on Thursday,” said Russ Mould, investment director at AJ Bell.

“Cost-cutting has been a key driver for many of their share prices in recent months, yet investors will want to know that underlying business is still healthy otherwise the recent rally in US tech names could grind to a halt.”

From an economic perspective, the first quarter was not as soft as initially thought, and this may support earnings and provide upside surprises. A number of companies have already warned profits would fall.

US GDP and the Fed

In addition to UK company earnings, markets will digest economic data points ahead of key central bank meetings in the coming weeks.

“In the US Q1 GDP, the employment cost index, core PCE, and consumer confidence are the highlights with us now in the Fed blackout period ahead of next week’s FOMC,” wrote Deutsche Bank Strategist Jim Reid.

“Meanwhile, we will see inflation and growth data in the Eurozone, and the BoJ’s decision in Japan on Friday.”

FTSE 100 risers

UK retail stocks were among the top performers, with JD Sports out in front, gaining 2% and Burberry adding 1.5%. Next was up 1.4%.

abrdn was 1.3% higher as the investment manager bounced off strong support just beneath 200p.

FTSE 100 fallers

Melrose was the top faller – down 3% – after completing the demerger of Dowlais Group last week. Fresnillo was 2% weaker, tracking the downside in gold and silver prices.

Thirty-nine of the FTSE 100’s constituents were down on Monday, with all but four down less than 1%.

AIM movers: Smoove bid approach and iEnergizer continues to fall ahead of cancelation

Andrew Hore
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AIM movers: Smoove bid approach and iEnergizer continues to fall ahead of cancelation

Smoove (LON: SMV) says it is in bid discussions with PEXA Group. These are at an early stage but could lead to a cash bid for the online residential property services provider. Australia-based PEXA Group offers online property services through the Property Now content hub that are similar to those offered by Smoove. There is no indication of bid price, but the shares jumped 44.2% to 46p.

Cleaning services provider React (LON: REAT) says interim revenues improved from £5.1m to £9.3m, while EBITDA soared from £133,000 to £925,000. That is a combination of the acquisition of LaddersFree and organic growth. This underpins the expectation of trebled full year pre-tax profit of £2.1m. The share price rose 6.52% to 1.225p, which is eight times prospective earnings.

Cancer diagnostics company Angle (LON: AGL) shares continue to rise following last Friday’s 2022 results announcement. The price is 9.9% ahead at 27.75p, which is 56% higher than one week ago. There is enough cash to fund the business until the second half of 2024 as Angle seeks to take advantage of the FDA approval of its Parsortix device.

Frasers Group (LON: FRAS) has increased its direct stake in N Brown Group (LON: BWNG) from 12.6% to 17.6%. Previously there was a contract for difference which meant that the total stake was 17.9%. The N Brown share price improved 5.26% to 28p.

Shares in business process outsourcing firm iEnergizer (LON: IBPO) continue to fall ahead of plans to cancel the AIM quotation on 26 May. As EICR (Cyprus) owns 82.7% the shareholder vote is a formality. The lack of free float has hampered liquidity and the costs of the quotation outweigh any benefits. There was a further 51.5% decline to 32.95p.

Technology investment company Asimilar (LON: ASLR) is also leaving AIM and trading in the shares has recommenced following the publication of the latest accounts. The share price fell by one-third to 1.25p. At the end of September 2022, net assets were 5.53p a share. A general meeting will be held on 18 May and the cancelation should happen on 26 May. Asimilar will retain its Aquis quotation.

Cleantech Lithium (LON: CTL) has been hit by uncertainty relating to Chile’s National Lithium Strategy. Cleantech Lithium says that it has been reassured that its lithium assets will not require majority state participation because they are smaller scale. The share price is 15.5% lower at 41p. This is the lowest level since January.

Touchstone Exploration (LON: TXP) has confirmed that there is light crude oil present in the Royston-1X production test but failed to flow oil to surface. This suggests it is a low permeability reservoir. Four more zones will be tested. The share price declined 9.92% to 59p.

FTSE 100 bank earnings preview Q1 2023

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FTSE 100 bank earnings preview Q1 2023

What to look out for from upcoming Q1 2023 FTSE 100’s banks updates.

The FTSE 100’s banks are set to report Q1 2023 results in the coming days and weeks, with Standard Chartered kicking off on Wednesday.

FTSE 100 bank reporting dates:

  • Standard Chartered (LON:STAN) – Wednesday 26th April
  • Barclays (LON:BARC) – Thursday 27th April
  • Natwest (LON:NWG) – Friday 28th April
  • HSBC (LON:HSBA) – Tuesday 2nd May
  • Lloyds (LON:LLOY) – Wednesday 3rd May

What to watch out for

Deposit inflows/outflows

Q1 banking earnings and commentary will be primarily dominated by the mini-crisis that started in the US with SVB and culminated with UBS’s takeover of Credit Suisse.

The inflows or outflows of deposits will gauge confidence in each UK bank during this period. As panic swept through the banking system over three weeks in March, depositors rushed to move their cash into institutions deemed ‘safer’ than others caught up in the crisis.

The impact on UK bank deposits isn’t expected to be as pronounced as for US and European banks, but any changes in deposits will be a fascinating insight into the perception of each institution.

The FTSE 100 banks are broadly considered high-quality institutions and outflows will be minimal. Indeed, the five FTSE 100 banks mentioned are more likely to have received inflows.

Net interest margin

A key profitability metric, net interest margin (NIM) for the period will dictate banks’ financial performance. Comparisons to the same period a year ago will show dramatically higher NIMs after a series of rate hikes throughout 2022. The Bank of England and the Federal Reserve both hiked rates in Q1, so one would expect an increase in Q1 2023 NIMs compared to Q4 2022.

Any comments on the outlook for NIM will be closely watched after many UK banks said they saw limited improvement in NIM for the 2023 full year compared to the last half of 2022.

Profits for

Bad debt provisions

The outlook for the global economy saw provisions for bad debts increase in the last round of quarterly updates from UK banks. There is an expectation these provisions will be maintained, or even increased.

Provisions will impact profit before tax, and if banks decide to bolster provisions, the benefits of higher NIM could be offset.

There has been a mild improvement in the economic outlook globally so any fresh provisions shouldn’t be overly dramatic.

A consensus of analyst estimates sees Barclays setting aside £563m and NatWest £250m.

Investment banking activity

Investment banking activity considerations are really only reserved for Standard Chartered, HSBC and Barclays, with limited or no contribution to earnings at NatWest or Lloyds.

The poor state of financial markets in Q1 led to a depressed environment for corporate activity, which would have made advisory fees hard to come by.

Equity and fixed-income activities are also likely to be lower than in the same period last year.

Aquis weekly movers: Chris Akers increases stake in Semper Fortis Esports

Andrew Hore
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Aquis weekly movers: Chris Akers increases stake in Semper Fortis Esports

Chris Akers has raised his stake in Semper Fortis Esports (LON: SEMP) from 4.57% to 19.5%. The share price jumped by one-fifth to 0.15p. The April 2021 floatation price was 1p.

Equipmake Holdings (LON: EQIP) has agreed a partnership with H55 to develop electric aircraft technology. Switzerland-based H55 will use the company’s electric motors in its two-seater electric trainer for pilot training.

Hadron Capital, which was founded by Fenikso (LON: FNK) non-exec director Marco D’Attanasio, has acquired 1.2 million shares at 0.6p each in Fenikso. The share price is 8.33% higher at 0.65p.

Valereum (LON: VLRM) has sold Bitcoin mining assets to Aquis new entrant Vinanz (LON: BTC) in return for 27.3 million shares at 3p each. The Valereum share price rose 5.71% to 5.55p. The Vinanz share price ended the week at 3.5p.

Chapel Down Group (LON: CDGP) finance director Rob Smith bought 407,462 shares at an average price of 34.7p, taking his stake to two million shares. The share price is 2.94% higher at 35p.

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Fallers

Goodbody Health Inc (LON: GDBY) has decided to leave Aquis and the share price slumped 44.6% to 0.9p. It also reported a fall in revenues from £17.1m to £10m and an increased loss of £4.9m.

Coinsilium Group (LON: COIN) has raised £258,000 at 1.5p a share, with warrants attached that have an exercise price of 3p. The market price fell 9.68% to 1.4p.

Tap Global Group (LON: TAP) has increased revenues and users since reversing into an Aquis shell earlier this year. First quarter revenues were £1.2m, compared with £250,000 in the corresponding period last year. The regulated cryptocurrency app company increased users by 30% to 144,305. The share price slipped 4.55% to 3.15p. That is lower than the market price prior to the reversal.

Arbuthnot Banking (LON: ARBB) announced a £12m share issue at 925p a share at the end of the previous week. The share price subsequently fell 3.63% to 930p.

AIM movers: Advanced Oncotherapy seeks Nasdaq reversal

Andrew Hore
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AIM movers: Advanced Oncotherapy seeks Nasdaq reversal

Proton therapy cancer treatment developer Advanced Oncotherapy (LON: AVO) announced a strategic review. The share price recovered 66.7% to 4.375p – after being around its all-time low. A Nasdaq listing is being considered, which could involve selling the business to an existing Nasdaq company. There are no current discussions and cash is running out. Management hopes to obtain additional working capital by issuing more loan notes. That could extend the company’s cash until the end of May.

Kromek (LON: KMK) has secured an initial seven-year agreement with a manufacturer to develop CZT-based detectors for advanced medical imaging scanners. There will be a short development phase before commercial supply commences. A separate development collaboration with Analogic Corp covers medical imaging and security. Kromek also says its gross margins are improving as third quarter revenues increase and the mix of business changes. The share price increased 54.6% to 8.35p.

Supercapacitors manufacturer CAP-XX Ltd (LON: CPX) has completed the quality audit to supply German automotive components manufacturer Continental Automotive. The supply agreement starts in 2024 and lasts until 2030.  The shares are 46.1% higher at 2.775p.

Intelligent Ultrasound (LON: IUG) shares jumped 44.1% to 10.45p, although that is low the high of 11.1p earlier in the week. Results were in line with expectations, but AI revenues are set to multiply. Intelligent Ultrasound could move into profit in 2024.  

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Fallers

Business process outsourcing firm iEnergizer (LON: IBPO) plans to cancel is AIM quotation and a general meeting will be held on 16 May to gain shareholder approval. As EICR (Cyprus) owns 82.7% that is a formality. The lack of free float has hampered liquidity and the costs of the quotation outweigh any benefits. Management expects to leave AIM on 26 May. There are plans for a matched bargain facility. It appears that many smaller shareholders are selling – sometimes just one or two shares – and the share price has plunged 78.7% to 68p.

Woodbois (LON: WBI) slid 64.7% to 0.38p following news that the lender to its Denmark-based Woodgroup timber trading subsidiary has given notice on a $6m lending facility. The facility provided by Sydbank is fully drawn, but there is also $3.1m in cash deposits with Sydbank, which wants a refinance plan by the end of May. Premier Miton subsequently sold its 9.96% stake.

Environmental and life sciences technology company DeepVerge (LON: DVRG) says that revenues have been incorrectly recognised. That means that the 2022 figure will be 45%-50% lower than the £17.2m previously flagged. Some of the expected revenues have been delayed while others will not be recognised. The order book is more than £10m and this will be recognised in 2023 and 2024. There is £1m in the bank and more funding will be required. The share price dived 60.3% to 0.575p, which is a new low.

Echo Energy (LON: ECHO) reported lower gas production in the first quarter of 2023 due to maintenance. Net liquids production and sales was also lower because fuel oil stocks were high in Argentina. This has led to a reduction in cash, and it will be difficult to raise cash from a share issue. The share price slumped 56% to 0.0286p.

Angle shares bounce back on Parsortix prospects

Andrew Hore
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Angle shares bounce back on Parsortix prospects

Cancer diagnostics developer Angle (LON: AGL) reported 2022 figures in line with expectations, but the strong prospects for the Parsortix system and services, plus the cash pile have led to a jump in the AIM-quoted share price is 19.5% higher at 24.5p.

Parsortix is the first system that harvests circulating cancer cells from a blood sample for analysis that has been approved by the FDA. This is for metastatic breast cancer patients. Biopsies to be done with blood rather than through invasive operations.
Individual patients can be analysed to assess whether a particular treatment is appropriate. An assay development partnership with BioView is developing a HER2 test that will monitor the HER2 status of breast cancer patients. This will help to target the appropriate patients for the treatment. Management believes that could be a $2bn/ year testing market and it would boost demand for Parsortix systems.

Trials continue for other forms of cancer and there are discussions with additional partners. A prostate cancer clinical trial should be completed before the end of the year. Laboratory developed tests for prostate and ovarian cancer are in the pipeline.

In 2022, revenues edged up to £1.04m with an initial contribution from the pharma services business. The loss increased from £17.4m to £24.4m. There was an initial contribution from pharma services and revenues are building up this year.

There was £31.9m in cash at the end of 2022, which is expected to last into the second half of 2024. Cost savings of £2.6m are expected this year, but money saved will be diverted to developing products and marketing.

Revenues could increase to £3m this year and more than double the following year. That will not have much affect on the loss will continue at around current levels.

A flotation on Nasdaq has been put on hold because of market conditions. Management also wants to build up the business before it applies for a US listing.

Last July, Angle raised £20m at 80p a share. That is more than three times the current share price. In the past couple of days, the share price has recovered from its recent low of 17p. That is the lowest the share price has been since 2010.

There is significant potential for Angle, but investors will have to continue to be patient.

Dowlais leads FTSE 100 higher on EV positioning

UK Investor Magazine
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Dowlais leads FTSE 100 higher on EV positioning

The FTSE 100 carved out gains on Friday with newly-listed Dowlais Group leading the index higher after demerging from Melrose.

London’s leading index was 0.1% higher at the time of writing.

Dowlais was the top riser, jumping over 6%, as investors snapped up the new listing which represents the automotive unit of GKN. GKN was previously a FTSE 100 company before being takeover by Melrose.

“The newly demerged Dowlais, essentially the automotive part of GKN demerged from Melrose, was the top riser on the index of leading UK shares with the shares chugging higher as investors react to the potential opportunities provided by the transition to electric vehicles in the industry it serves,” said AJ Bell investment director Russ Mould.

Uk-focused investors have little in the way of choice when selecting companies with direct exposure to EV manufacturing and Dowlais will be a welcome option for investors.

Retail sales

Following an increase in unemployment and higher-than-expected inflation data earlier this week, retail sales data released on Friday added to the downbeat picture of the UK economy.

“Retail sales fell 0.9% in March, compared with expectations of a 0.5% drop. Within this disappointing decline is difficult news for department and clothing shops which saw steeper drops,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“Retailers have been quick to point out that this was driven by poor weather conditions which discouraged spending in physical locations, but the broader issue runs much deeper than that.”

There was little reaction in the FTSE 100’s retail-focused stocks. Next was 1.4% higher at the time of writing.

FTSE 100 risers

As previously mentioned, Dowlais was the FTSE 100’s top riser on Friday.

There was a plethora of steady gains in stocks that could be considered good bets during an economic downturn. High-yielding Imperial Brands and National Grid were both up in the region of 1.5%.

Smith & Nephew, Rentokil Initial and Pearson all gained in excess of 1%.

FTSE 100 faller

Gains elsewhere in the FTSE 100 were offset by mining companies on Friday as economic uncertainty hit the notoriously cyclical sector.

Rio Tinto was down 4.5% and was at the bottom of the FTSE 100 performance table on Friday.

Nebeus has started a crowdfunding campaign on Seedrs

UK Investor Magazine
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Nebeus has started a crowdfunding campaign on Seedrs


Nebeus, the banking alternative for Web3, is excited to announce its investment opportunity on Seedrs, UK’s leading equity crowdfunding platform. This investment round aims to accelerate Nebeus’ growth and expand its range of services with a full trading platform, a new digital asset credit line that enables users to spend without selling their investments, and new DeFi (Decentralised Finance) products.

This investment round is an equity-based crowdfunding campaign with a pre-money valuation of €40M. In our previous Seedrs campaign, the company’s pre-money valuation was confirmed at €13.6M, reflecting a current company’s value growth of 295% over the past two years. For a detailed overview of Nebeus, please find our pitch deck here.

Nebeus has established itself as a reliable and user-friendly platform for bridging the worlds of cryptocurrencies and traditional banking in a single app, revolutionizing how people transact and manage their finances.

The funds raised from this investment opportunity will be allocated to a range of strategic initiatives, including developing new innovative DeFi services that will enable users to self-custody their digital assets.

Additionally, the investment will be used to integrate a new digital asset credit line, allowing users to spend without selling their cryptocurrency investments. This exciting development for Nebeus represents a significant step forward in the company’s mission to provide users with more flexible and convenient credit solutions.

Finally, the investment will allow Nebeus to expand into new financial markets with a full brokerage service that will enable Nebeus users to trade non-crypto financial products such as stocks, futures, commodities, and forex. By expanding Nebeus’s range of investment products, Nebeus is moving closer to becoming a financial super-app, democratizing access to a new era of finance.

“We’re excited to offer this investment opportunity to our community as we continue to grow and enhance Nebeus,” said Sergey Romanovsky, CEO of Nebeus. “We’re committed to revolutionizing the financial industry with our innovative app and expanding our services to meet the growing demand for financial and web products.”

“We believe that the future of finance is digital, and Nebeus is leading the charge with its innovative app unifying Web3 and traditional banking services,” said Michael Stroev, COO of Nebeus. “We’re excited to offer investors the opportunity to be a part of our growth and help us shape the future of finance.”

Nebeus’ investment opportunity is now live on Seedrs, and interested investors can find more information on the campaign page. Don’t miss this unique opportunity to invest in a company revolutionizing the financial industry.

AIM movers: Bid fuels Sureserve jump and iEnergizer set to leave AIM

Andrew Hore
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AIM movers: Bid fuels Sureserve jump and iEnergizer set to leave AIM

Sureserve (LON: SUR) is recommending a bid from Cap10 4NetZero Bidco, which is a vehicle for private equity company Cap10 Partners. The 125p a share bid values Sureserve at £214m and that is the highest share price since the company floated as Lakehouse in 2015. The market price is 37.2% ahead at 123.5p. Cap10 believes that taking the compliance and energy services provider company private will make it easier to focus on long-term goals.

UK Oil & Gas (LON: UKOG) is preparing to test the Pinarova-1 exploration well in Turkey after encouraging oil shows were detected. This is on the Resan licence, where the company has a 50% working interest. Drilling will continue in the zone. The share price is 15.3% higher at 0.083p.

Pathfinder Minerals (LON: PFP) has posted the circular to gain shareholder approval for the revised agreement for the disposal of IM Minerals. The share price rose 12.5% to 0.45p.

Trackwise Designs (LON: TWD) has been awarded the King’s Award for Enterprise in the innovation category. This is for its length-unlimited, multilayer flexible printed circuits. This has perked up the distressed share price, which is 8% ahead at 0.675p.

Business process outsourcing firm iEnergizer (LON: IBPO) plans to cancel is AIM quotation and a general meeting will be held on 16 May to gain shareholder approval. As EICR (Cyprus) owns 82.7% that is a formality. The lack of free float has hampered liquidity and the costs of the quotation outweigh any benefits. Management expects to leave AIM on 26 May. There are plans for a matched bargain facility. It appears that many smaller shareholders are selling – sometimes just one or two shares – and the share price has plunged 73.2% to 83p.

Yesterday afternoon Vela Technologies (LON: VELA) shares bounced up after it revealed that it has entered a put option deal to sell its 8% commercial interest in potential Covid treatment AZD1656 for £4m. However, the shares have lost some of those gains this morning and are down 14.9% to 0.02p. The option holder is Conduit Pharmaceuticals, which will pay in shares if the merger with Nasdaq-listed Murphy Canyon Acquisition Corp goes ahead.

Woodbois (LON: WBI) slid a further 8.75% to 0.365p following news earlier this week that the lender to its Denmark-based Woodgroup timber trading subsidiary has given notice on a $6m lending facility. The facility provided by Sydbank is fully drawn, but there is also $3.1m in cash deposits with Sydbank, which wants a refinance plan by the end of May. Premier Miton subsequently sold its 9.96% stake.

Biodexa Pharma (LON: BDRX) has fallen 5.56% to 4.25p ahead of the cancelation of the AIM quotation on 26 April.

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