Ceres Power shares surge on revenue upgrade and new manufacturing partner

UK Investor Magazine
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Ceres Power shares surge on revenue upgrade and new manufacturing partner

Ceres Power shares jumped on Monday after the green hydrogen company upgraded its revenue guidance for the year and announced a significant global licensing agreement for its solid oxide electrolyser cell (SOEC) technology.

Ceres Power shares were 16% higher at the time of writing.

Investors would have been more than delighted to see the group upgrades its full year revenue target to £50-60 million, a significant increase on last year’s £22.6 million.

Ceres Power is establishing itself as a real leader in green hydrogen and fuel cells and in a joint statement combining a trading statement and new partnership released on Monday, announced a new agreement with a Global OEM expected to generate substantial revenues for Ceres through licence fees, engineering services, and hardware sales over multiple years.

Additionally, the company will benefit from royalty payments on future commercial production and sales of SOEC equipment by the new partner. This revenue structure mirrors previous successful OEM licensing deals, reinforcing Ceres’ business model.

Revenue growth

The company’s interim results for the first half of 2024 are set to confirm a step change in revenue growth. Revenue for the period is projected to reach £27-29 million, more than doubling the £11.7 million reported in the same period last year.

Profitability has also seen a marked improvement, with gross margins climbing to 75-80%, up from 62% in the first half of 2023.

The company’s cash position remains solid, with approximately £126 million in cash and short-term investments as of 30 June 2024. While this represents a £14 million reduction from the end of 2023, it also indicates a slower cash burn rate compared to the previous year.

“We are making great commercial progress this year, and I am particularly excited by the advances in our highly efficient and differentiated SOEC electrolyser technology, which is now being adopted by several leading global companies with the manufacturing, supply chain and balance sheet strength to bring this technology to market at scale,” said Phil Caldwell, CEO of Ceres.

“This builds on Ceres’ strategy to establish partnerships in regions with strong manufacturing capability coupled with ambitious targets for the use of hydrogen for industrial decarbonisation. By licensing our best-in-class solid oxide technology, Ceres is establishing its clean energy technology as the industry standard and, through its partner network, is building towards delivering decarbonisation at the scale and pace needed globally for the energy transition.”

Vodafone sells Vantage Towers stake in €1.3bn deal

UK Investor Magazine
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Vodafone sells Vantage Towers stake in €1.3bn deal

Vodafone Group Plc has announced the sale of an additional 10% stake in Oak Holdings GmbH, the partnership controlling Vantage Towers, for €1.3 billion. This transaction completes the planned 50:50 joint ownership structure with a consortium of infrastructure investors led by Global Infrastructure Partners and KKR, as initially outlined when the co-control partnership was established.

The telecommunications giant has secured €1.3 billion from this equity stake sale, priced at €32 per share—matching the valuation of the initial transaction announced in November 2022. This latest deal brings Vodafone’s total net proceeds from its Vantage Towers divestment to a substantial €6.6 billion, significantly bolstering the company’s financial position.

Vodafone plans to utilise the proceeds for debt reduction, with the sale expected to decrease the company’s Net Debt to Adjusted EBITDAaL ratio by 0.1x.

The completion of this transaction marks another step in Vodafone’s strategy to streamline the business and focus on core operations.

Vodafone shares were little changed by the news.

Greencore Group – Will The E-Coli Outbreak Munch Into This Food Manufacturers Profits In 2024 – Q3 Update Next Week Could Allay Any Such Fears 

Mark Watson-Mitchell
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Greencore Group – Will The E-Coli Outbreak Munch Into This Food Manufacturers Profits In 2024 – Q3 Update Next Week Could Allay Any Such Fears 

On Tuesday of next week, 30th July, we should be seeing the world’s biggest sandwich maker declaring its Q3 Trading Update covering the April to end-June period. 

E-Coli Outbreak 

The Statement from the Greencore Group (LON:GNC) should cover an update on the effect of the e-coli outbreak in mid-June and the actions that the group took to minimalise any mega-impact to its business. 

It was during the last two weeks of June that the group declared that it had taken the precautionary step of recalling various sandwiches, wraps and salads because of possible contamination with E.coli. 

The products called back were supplied to Aldi, Boots, ASDA, Morrisons, Amazon, the Co-op and Sainsburys. 

Greencore was not alone, because a number of other food manufacturers also recalled their own products. 

A fair guess is that the major supermarkets and leading independent retailers were also somewhat cautious with their orders to Greencore for at least the month covering and subsequent to the outbreak. 

The Business 

The Dublin-based Greencore Group supplies all of the major supermarkets in the UK, as well as convenience and travel retail outlets, discounters, coffee shops, food service and other retailers.  

It is a leading manufacturer of convenience foods, supplying a wide range of chilled, frozen and ambient foods to retail and food service customers in the UK.  

The company operates 16 world-class manufacturing sites, made up of eight sandwich units, five chilled ready meal units, three salad units, one chilled quiche unit, one ambient cooking sauce and pickles unit and Yorkshire pudding unit.  

The group also runs 17 distribution centres in the UK, with industry-leading technology and supply chain capabilities. 

Its principal customers include: Aldi, ASDA, BP, Boots, Caffe Nero, Co-op, Lidl, M&S, Poundland, Sainsburys, Shell, Tesco and Waitrose. 

The group holds very strong market positions in a range of categories including sandwiches, salads, sushi, chilled snacking, chilled ready meals, chilled soups and sauces, chilled quiche, ambient sauces and pickles, and frozen Yorkshire Puddings. 

The £796m capitalised group is no mean player within the food sector in the UK – last year it made some 779m sandwiches and other food-to-go products, as well as 132m chilled ready meals, 45m chilled soups and sauces and 245m jars of cooking sauces, pickles and condiments. 

Analyst View 

Analyst Clive Black at Shore Capital Markets is positive about the group’s prospects. 

For the current year to end September his estimates, before the e-coli scare, were for slightly lower sales at £1.81bn (£1.91bn) while expecting a better margin return to £65.0m (£55.5m) adjusted pre-tax profits, lifting earnings up to 10.2p (8.9p) with a dividend of 3.4p (nil) per share. 

For the year to end September 2025 he estimated £1.85bn revenues, £72.0m profits, 11.6p per share in earnings and a 3.9p dividend. 

Leaping forward to the 2026 year, his figures were for £1.88bn sales, £83.0m profits, earnings of 11.6p and a 4.5p dividend. 

Market opinions appear somewhat mixed – eight analysts follow the stock, with three calling it a Buy, three a Hold, one a Sell and one of no opinion – with the highest Price Objective being 200p a share, the lowest 110p, and the average being 158p. 

My View 

This company deserves a far better rating than that currently accorded to it, despite any scares. 

It has significant market shares and is a major supplier into the retail sector. 

Now trading at 177p they should be bought by medium-term growth investors, especially on any price dips. 

CleanTech Lithium produces battery-grade lithium at DLE pilot project

UK Investor Magazine
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CleanTech Lithium produces battery-grade lithium at DLE pilot project

CleanTech Lithium has announced the completion of the first stage of production at its Direct Lithium Extraction (DLE) pilot plant in Copiapó, Chile, reporting impressive recovery rates and high-grade lithium production.

The DLE pilot plant operated for 384 hours, completing 14 cycles and producing 88 cubic metres of concentrated eluate. This volume is equivalent to approximately one tonne of lithium carbonate. The DLE adsorbent achieved a lithium recovery rate of 95% from the brine, with a total recovery (including adsorption and desorption) of 88%.

Notably, the process demonstrated high impurity rejection rates, resulting in a low-impurity eluate suitable for downstream conversion. The concentrated eluate is being shipped to Conductive Energy in Chicago, USA, for conversion into battery-grade lithium carbonate.

Preliminary test work on a 200-litre sample of the eluate has yielded promising results. Multiple samples of lithium carbonate with 99.75% purity were produced, confirming the process’s efficiency and repeatability in achieving battery-grade lithium.

The news is a major boost CleanTech Lithium’s Laguna Verde project and investors who will be pleased to see the pilot project open the doors to the next stage of development in CleanTech’s Chile operations. The company plans to provide large test samples of lithium carbonate to potential offtake partners for product qualification. A reserve report for Laguna Verde is scheduled for completion in October 2024, pending the finalisation of a re-injection well in September.

“We are very pleased by these results as it shows we can produce battery-grade lithium with low impurities from our Laguna Verde brine project. Working with our partners on the downstream process, Forward Water and Conductive Energy, we can now demonstrate the entire DLE process from brine to final lithium product,” said Steve Kesler, Executive Chairman and Interim CEO, of CleanTech Lithium.

“The optimised downstream process will now be applied to the initial volume of 88m3 of concentrated eluate, or approximately 1 tonne of LCE, produced from the first stage of production from our DLE pilot plant. This will produce significant test sample volumes of battery-grade lithium carbonate for commencement of testing with potential strategic partners. This is important whilst the Chilean government is reviewing the feasibility of lithium projects to identify the most advanced companies in Chile and if they are to reach their target of having three to four new lithium projects in development by 2026.”

Aquis weekly movers: Helium boost for Voyager Life

Andrew Hore
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Aquis weekly movers: Helium boost for Voyager Life

M3 Helium, where Voyager Life (LON: VOY) has an option to acquire the company, says two samples from the Rost well at Fort Dodge in Kansas showed 5.1% helium. Two other samples were above 4.8% helium. These are highly commercial levels. The share price jumped 61.5% to 5.25p.

KR1 (LON: KR1) is simplifying its share structure through providing a way of redeeming deferred C and deferred D shares. They have no significant economic value. The share price is 8.86% higher at 64.5p.

ProBiotix Health (LON: PBX) nearly doubled interim revenues to just above £1m and reduced the loss. A US partner has obtained positive clinical results for IBS and antibiotic recovery for a probiotic containing the company’s LP (LDL). The share price rose 7.14% to 3.75p.

Automotive electrification Equipmake (LON: EQIP) revenues are improving, but the loss has increased. In the year to May 2024, revenues were 60% ahead at £8.1m. There was £2.5m in cash at the end of May 2024. There are plans to reduce costs and focus on higher margin technology. The share price increased 5.56% to 4.75p.  

Inqo Investments (LON: INQO) has invested in Flybox Budongo, which has developed a modular containerised system to produce Black Soldier Fly eggs and five-day old larvae that can convert organic waste into animal feed. The share price edged up 0.8% to 66.5p.

FALLERS

Shares in housebuilder St Mark Homes (LON: SMAP) continue to decline ahead of shareholder approval at the AGM on 31 July for the departure from the Aquis Stock Exchange. The price slumped by one-third to 15p, which is a 71% decline this year.

Christopher Potts reduced his stake in Shortwave Life Sciences (LON: PSY) from 11.65% to less than 3%. The share price dipped 18.9% 1.225p.

Valereum (LON: VLRM) says blockchain consulting firm Antier will collaborate in the development of the V-Wallet that will form part of the VLRM Market’s ecosystem. This should be launched later this year and will enable uses to buy, sell and hold multiple cryptocurrencies. The share price fell 13.3% to 3.25p.

Gunsynd (LON: GUN) says investee company Metals One has published a JORC inferred mineral resource of the P5 area of the Finland – Black Schist project of 29Mt. There is 1.8Mt attributable to Gunsynd, which owns 6.25% of a subsidiary of Metals One, and that company has an option to buy back the stake. Gunsynd shares slipped 11.5% to 0.115p.

Tips update: Transense Technologies gains momentum

Andrew Hore
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Tips update: Transense Technologies gains momentum

Transense Technologies (LON: TRT) is starting to demonstrate its cash generation abilities and the share price is reacting to that. A strong second half means that full year figures will be ahead of expectations.

The Translogik tyre monitoring equipment business had a particularly strong fourth quarter. That meant that group revenues were £4.2m, instead of £4m as forecast, and that compares with £3.53m in the previous year. The pre-tax profit estimate is maintained at £1.3m.

Translogik revenues were 9% higher at £1.12m, which was after a weak first half. This increased momentum is good ...

AIM weekly movers: Mindflair discount narrows

Andrew Hore
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AIM weekly movers: Mindflair discount narrows

Investment company Mindflair (LON: MFAI) is still benefiting from the acquisition of investee company Landvault by AI company Infinite Reality. Landvault is valued at $450m in shares and is part of the portfolio of Sure Valley Ventures Fund, where MindFlair holds13%, plus a further 5.3% via its stake in Sure Ventures (LON: SURE). MindFlair’s share could be worth nearly $1.1m. The end-2023 NAV was £5.84m, equivalent to 2.13p/share. The share price is 55.6% higher at 1.4p. The discount to the 2023 NAV is still more than one-third and that does not include the gain on disposal.

Intelligent Ultrasound (LON: IUG) rose on the back of the news that it is selling its Clinical AI operations to GE for £40.5m. The consideration is equivalent to 12.4p/share. So far, £12.2m has been invested in the development of AI. There are plans to return a substantial amount of this cash to investors. This deal does not include the NeedleTrainer and NeedleTrainer Plus products or the simulation business. The remaining business had annual revenues of £10m last year. Lower simulation sales meant that the latest interim revenues fell from £6.1m to £5.3m. That includes £1.5m from Clinical AI, compared with £2m for the whole of the previous year. The share price jumped 55.4% to 10.875p.

Caspian Sunrise (LON: CASP) shares have returned from suspension following publication of 2023 accounts. Average oil production fell 16% to 1,800barrels/day last year. Current aggregate production is 2,300 barrels/day from the BNG contract area, which is being sold for up to $88m, which is above the previous expectation of $83m. Production is expected from Block 8 and West Shalva later this year. The board will consider special dividends and share buy backs. The share price recovered 53.8% to 5p.

Surface Transforms (LON: SCE) has recovered from its recent all time low after it confirmed revenues guidance of £17.5m for 2024, although the figures will be second half weighted. Interim sales were £4.6m. Pre-production engineering revenues will be recognised in the second half. Capacity is being increased. The ceramic brakes technology company could become cash generative during 2025. The share price improved 52.8% to 2.025p.

FALLERS

Kyrgyzstan miner Chaarat Gold Holdings (LON: CGH) is the latest company to announce the intention to cancel its AIM quotation and the first of three in the worst performers. This is a condition of a recapitalisation proposal that will more than halve existing liabilities to less than $20m. The maturity date of the convertible loan will be extended from July 2024 to December 2025. There will also be an additional facility of $5m that can be drawn down. The $550,000 of salary owed to former executive chairman Martin Andersson will be paid in shares. The AIM departure is expected to be on 16 August. The share price slumped 76.1% to 0.2p.

Destiny Pharma (LON: DEST) is leaving AIM to make it easier to fund the XF-73 post-surgical infection prevention treatment through access to private capital. It has been difficult to secure a commercial partner for XF-73. Destiny Pharma needs to find funding for a phase 3 study. The share price dived 44.7% to 4.7p.

Shares in semiconductor designer Sondrel (LON: SND) have returned from suspension following publication of 2023 accounts, but plans are going ahead to cancel the AIM quotation. Last year, Sondrel lost £18m on revenues of £9.43m. The share price slipped 38.1% to 3.25p.

Vast Resources (LON: VAST) raised £600,000 at 0.1p/share. Each share comes with one warrant exercisable at 0.4p. The cash will fund the reorganisation of Baita Plai to reduce production costs and to cover working capital requirements. David Jones raised his stake from 8.84% to 12.6%. The share price declined 34.4% to 0.105p.

United Utilities on track as it prepares Ofwat response

Andrew Hore
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United Utilities on track as it prepares Ofwat response

United Utilities (LON: UU.) says 2024-25 trading is in line with expectations. Management plans to submit its response to Ofwat’s draft determination on 28 August and final determination is expected in December.

The water business secured two strategic optimisation partnerships earlier in the year and since May it has entered agreements with seven leading engineering and infrastructure businesses and 18 design and build organisations. This will enable the delivery of the AMP8 investment programme.

Unitied Utilities is on track to achieve four-star status in the 2024 Environmental Performance Assessment. However, earlier in the week it was announced that it will be included in Ofwat’s wastewater treatment investigation.

Consensus forecast pre-tax profit forecast is £382.8m, with a further improvement to £573.4m forecast for next year. The share price dipped 0.4% to 1024.25p.

AIM movers: Parkmead awarded offshore licence and SIMEC Atlantis Energy loses AGM vote

Andrew Hore
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AIM movers: Parkmead awarded offshore licence and SIMEC Atlantis Energy loses AGM vote

Parkmead (LON: PMG) has been formally awarded the UK offshore licence P2634. This is situated in the Outer Moray Firth. Orcadian Energy (LON: ORCA) is the joint venture partner. There will be an assessment of whether a commercial development can be made and gain regulatory approval. The Parkmead share price rose 19.2% to 14p.

Publishing software and services provider Ingenta (LON: ING) has won three new contracts. Two of these are follow-on contracts with existing customers. These are multi-year contracts worth mor than £500,000. The largest contract is a three-year deal to migrate, host and support an existing customer’s Vista deployment onto Ingenta’s dedicated infrastructure. This worth £1.4m over three years. The share price increased 7.14% to 127.5p.

Digital advertising services provider Dianomi (LON: DNM) has more than clawed back yesterday’s loss following the trading statement. Interim revenues were flat, but gross margins dipped to 26%. Overheads were reduced and profitability was similar to the second half of 2023. There was £8.1m in the bank. There is still uncertainty about the timing of contracts. The share price is 9% ahead at 60.5p.

Steel structures supplier Billington (LON: BILN) shareholder Gutenga Investments has sold 1.86 million shares, reducing its stake to 20%. Charles Stanley has increased its stake from 4.93% to 9.93%. The share price is 3.06% higher at 505p.

FALLERS

Semiconductor designer Sondrel (LON: SND) shares continue to fall following the return from suspension after publication of 2023 accounts. This is ahead of the proposed general meeting vote to cancel the AIM quotation. The share price is 13.3% lower at 3.25p.

SIMEC Atlantis Energy (LON: SAE) lost the AGM vote to dis-apply pre-emption rights. There were 97.1% of the votes against the proposal. The share price declined 5.08% to 2.8p.

There was further profit taking in chain and transmission equipment manufacturer Renold (LON: RNO) after it beat upgraded full year expectations and there was a pre-tax profit upgrade to £22.8m for the year to March 2025. The share price fell 5.31% to 51.7p.

YouGov – The Research Group’s Shares Collapsed After The Recent Profit Warning – Is Now The Right Time To Join The Insiders? 

Mark Watson-Mitchell
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YouGov – The Research Group’s Shares Collapsed After The Recent Profit Warning – Is Now The Right Time To Join The Insiders? 

With one of the world’s largest research networks YouGov (LON:YOU) will certainly have gained more credence and business, especially as the world seems to be going in and out of Elections. 

However, the recently issued Current Trading Update noted that following its H1 results it has been seeing lower sales bookings than had been previously anticipated. 

The Business 

YouGov is an international online research data and analytics technology group. 

With operations in the UK, the Americas, Europe, the Middle East, India and Asia Pacific, it is certainly one of the world’s largest research networks. 

The £532m capitalised group considers that its mission is to offer unparalleled insight into what the world thinks. 

YouGov’s innovative solutions help the world’s most recognised brands, media owners and agencies to plan, activate and track their marketing activities better. 

Shares Collapse 

The day before the Update was released, on 20th June, the group’s shares were trading at around the 820p level. 

The unexpected news saw them being almost halved in price in reaction, falling 380p to close that day at 440p. 

Within a week they had eased even further to 402.63p. 

Insider Dealings 

Since the Update it has to be noted that a number of the group’s Directors have been buyers of the shares. 

They have a very short period of ability to deal in the stock because the company will be announcing its Year End Trading Update on Thursday 1st August. 

Market View 

A couple of weeks ago analyst Jessica Pok at Peel Hunt chopped her Price Objective for the group’s shares, from her previous aim of 1,500p a share to just 630p. 

At that time, she noted that she disagreed with the market view that the business is broken. 

The shares have fallen since its full-year profit warning led Pok to reduce her full-year 2024 and 2025 earnings per share targets by 44% and 39%, respectively, with conservative growth assumptions built in for next year.  

“The shares (then 420p) are currently trading at 11 times full-year 2025 price to earnings, which is near YouGov’s lowest rating in over a decade. 

The market is pointing to a broken business, which we do not believe is the case.  

However, we expect the shares to trade sideways until investors have more confidence in the future strategy and gain further insight into management’s plan of action at the prelims.” 

On the professional investor front Julian Fosh and Anthony Cross, Managers of the Liontrust GF Special Situations Fund, which is valued at some £80m, consider that it will take time to rebuild investor confidence in the company after its profit warning, but they remain invested. 

My View 

It will be more than interesting to see just how the group’s shares perform in the next couple of weeks up to the Year End Trading Update being announced on Thursday 1st August. 

The very point that ‘insiders’ took advantage of the collapsed share price is perhaps predictive, so one might hope that there is good news in the offing. 

The shares have already started to show some signs of price recovery, currently trading at around the 460p level. 

The group describes itself as the #1 most-quoted market research source worldwide, being trusted to provide unparalleled into what the world thinks. 

I wonder what the world thinks about YouGov’s shares right now? 

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