Castillo Copper shares gain on BHA project contractor confirmations

Natasha Doris
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Castillo Copper shares gain on BHA project contractor confirmations

Castillo Copper shares gained 8.4% to 0.89p in early morning trading on Wednesday, after the mining group announced the appointment of two contractors for its inaugural drilling campaign at the BHA project’s east zone in Q4.

The company confirmed the appointment of AllState Drilling, who will perform the campaign which comprises one diamond core and 17 RC drill-holes for 2,100 metres, with depths between 100 metres to 160 metres.

Castillo Copper also noted the addition of FieldCrew, who previously performed work at the NWQ Copper project in Queensland, Australia. FieldCrew will manage the day-to-day concerns of the drilling campaign.

Meanwhile, Castillo Copper reported Australia secured preferred status for the supply of critical minerals to the US’s electric vehicles battery program.

The mining group said it wanted to deepen its knowledge of the East Zone’s Rare Earth Elements (RRE) potential at the Sisters Prospect and Iron Blow targets.

The Sisters Prospect’s two planned RC drill-holes will be analysed for copper-cobalt gold and REEs, and the Iron Blow operation will have its additional drill-core samples tested to determine if there are further extensions to known mineralisation, following the prior discovery of REEs.

“The Board is delighted to have secured AllState and FieldCrew as key contractors for the upcoming drilling campaign. Notably, AllState is a highly reputable drilling group, while FieldCrew has done considerable fieldwork across the BHA and NWQ Copper Projects,” said Castillo Copper managing director Dr Dennis Jensen.

“In addition, with sentiment currently positive towards REEs, the Board is interested in boosting its understanding of the potential across The Sisters and Iron Blow Projects.”

Alien Metals shares jump on Anglo American agreement

UK Investor Magazine
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Alien Metals shares jump on Anglo American agreement

Alien Metals shares surged on Wednesday after the metals explorer announced an agreement with global mining giant Anglo American related to the Hancock Iron Ore Project in Western Australia.

Alien Metals, through its wholly-owned subsidiary Iron Ore Company of Australia, has signed an agreement for 100% of the offtake from the Hancock project and $15 million funding.

Alien Metals will have access to a $10 million advance payment facility and upto $5 million in vessel payments for the first 12 months.

Anglo American will receive an agreed royalty for the 24 months as part of the deal that includes conditions such as a $5 million equity raise being used for Hancock and the approval of permits and licenses.

Today’s announcement is major endorsement of the Hancock project and the development work by the Alien Metals team. Alien Metals shares traded as high as 0.80p, before falling back.

“We are really pleased to have signed this Mandate Letter with a leading, global mining company of Anglo American’s stature,” said Bill Brodie Good, CEO of Alien Metals.

“The Mandate Letter provides a pathway to negotiate and agree the potential development debt funding, and a 100% offtake solution. This Mandate Letter supports our near-term production aspirations and, unlike conventional debt finance, the potential bespoke funding with offtake provides alignment between the parties for the pursuit of scale across multiple assets with a world class counterparty.

“The Board is continuing to assess development plans at Hancock which may reduce the initial capex requirement outlined in the October 2021 Scoping Study and will advise once this process is complete.”

Alien Metals operates the Hancock Project in a diverse portfolio of global mining assets which includes Mexican Silver projects and PGM asset in Australia.

Serabi Gold shares fall as HY1 revenues and profits slide

Natasha Doris
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Serabi Gold shares fall as HY1 revenues and profits slide

Serabi Gold shares fell 7.2% to 33.4p in early morning trading on Wednesday after the gold mining company announced a revenue decrease to $31 million in HY1 2022 from $32 million the last year.

Serabi Gold confirmed a problematic Q1 2022, with a net cash outflow of $2.5 million driven by lower production across the financial term. Production picked up by 19% in Q2, however profits and revenue still suffered a significant blow.

The firm reported a rising cost of sales to $23 million compared to $18 million.

Serabi Gold highlighted an EBITDA fall to $5 million against $11 million, alongside a drop in operating profit before finance and tax to $2 million from $8 million in the previous year.

The commodities group noted a pre-tax profit slide to $2 million compared to $6 million.

Serabi Gold mentioned a basic EPS decline to 2.74c from 9.06c.

The company pointed out cash and cash equivalents of $9.8 million at 30 June 2022 against $12.2 million at 31 December 2021, along with net assets of $84.1 million from $79.8 million.

“Compared with the same six-month period in 2021, we have incurred a 46 per cent increase in spending on underground drilling to grow the mineral resource inventory and build long term mining plans, a 48 per cent increase in power costs which includes diesel for generators and grid supplied electricity as well as increased costs of reagents and other consumables across both the mining and processing activities,” said Serabi Gold in a statement.

“As well as the continued investment in underground drilling to grow the mineral resource at Palito, we have continued to update the mining fleet with an additional US$1.5 million spent on capital equipment in the second quarter compared with less than $400,000 in the same period of 2021 and we continue to progress the mine development at Coringa. This capital programme together with the underground drilling activities are the platform for building the future production growth and complement the continued potential presented by the regional exploration that is attracting external interest.”

“The cash position remains strong, with cash held at 30 June 2022 of US$9.8 million with a further US$1.9 million received shortly after the month end for a sale of copper/gold concentrate following a small delay to sailing schedules.”

BBGI Global Infrastructure S.A. NAV rises 6.7% on inflation-linked equity cash flows

Natasha Doris
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BBGI Global Infrastructure S.A. NAV rises 6.7% on inflation-linked equity cash flows

BBGI Global Infrastructure S.A. shares climbed 0.5% to 162.4p in early morning trading on Wednesday, following an investment basis NAV rise of 6.7% year-on-year to £1 billion in HY1 2022.

The firm mentioned its equity cash flows were positively linked to inflation, resulting in its NAV increase.

The global infrastructure investment group confirmed a 6.5% NAV per share growth to 149.8pps compared to 140.7pps the year before.

BBGI Global Infrastructure S.A. reported a 7.48pps target dividend for FY 2022, 7.63pps for FY 2023 and a 7.78pps target dividend for FY 2024.

The company announced a 2.03 times cash dividend cover against 1.31 times in FY 2021.

BBGI Global Infrastructure Group S.A. noted a Total Shareholder Return since IPO of 150.3%, representing 9.1% on a compound annual basis.

“I am pleased to report that BBGI has delivered an exceptionally strong operational performance for the first half of 2022. This performance reflects the low-risk investment strategy that the Company has followed since IPO in 2011. Our cash dividend cover of 2.03x supports the Company’s target dividend of 7.48 pps for 2022, and reaffirmed target dividend of 7.63pps for 2023 and of 7.78pps for 2024,” said BBGI Global Infrastructure S.A. non-executive chair Sarah Whitney.

“Over the period to 30 June 2022, the Company’s high quality inflation-linked cash flows led to a total increase in NAV of £47 million, representing a 4.7 per cent uplift, and highlights the portfolio’s genuine high-quality inflation-linkage. This contributed to a NAV per share increase of 6.5 per cent or 9.1 pence in the reporting period.”

“Despite this challenging macroeconomic backdrop, given the AAA and AA-rated countries in which we invest and the fundamentals of our investment proposition, we have confidence in our resilient and defensive strategy. In an uncertain world, I am reassured by our ability to continue to deliver long-term value to our stakeholders.”

Braemar Shipping Services: Finals Full Steam Ahead

Jon Levinson
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Braemar Shipping Services: Finals Full Steam Ahead

raemar (LSE: BMS), after reporting strong trading with its delayed Finals to  End Feb, the price improved to 334p.  Its Revenue increased 21% to £101m with   a spectacular 209% recovery in profits to £13.9m and the EPS of 27.95p gives a P/E of  12x with a  2.7% yield. BMS is the smallest of the few listed Shipbrokers, and it operates from 19 countries   The new team is focusing on its core shipbroking and corporate finance business so have disposed of non-core activities, such as the Engineering Division and loss-making businesses have been clo...

CentralNic continues impressive growth

Andrew Hore
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CentralNic continues impressive growth

Strong trading momentum continues at domain name and online marketing services provider CentralNic (LON: CNIC) and existing forecasts could be upgraded again later in the year if growth continues at current levels. A further boost to earnings is expected from a refinancing of the company’s bonds.
The growth is coming from the online marketing division where revenues jumped from $96.4m to $257.8m, although gross margin declined so there was a lower percentage increase in gross profit – although it did still more than double. There are no signs of a slow down. The domain name distribution and se...

40,000 BT and Openreach workers join wave of UK strike action

Natasha Doris
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40,000 BT and Openreach workers join wave of UK strike action

BT and Openreach staff kicked off the latest strike in the recent wave of industrial action sweeping the UK as the cost of living crisis bites.

The Communication Workers Union (CWU) confirmed over 40,000 of its members would be taking strike action over Tuesday and Wednesday.

BT and Openreach workers will be striking for the first time in 35 years to protest insufficient salary increases.

The action coincides with the CWU’s Royal Mail strike, which is scheduled to start on 31 August with 115,000 members participating.

The industrial action joins a massive movement of sectors across the UK demanding higher pay to keep pace with inflation, which currently sits at 10.1% and is expected to rise to 13% in autumn this year.

BT Group said it offered a 5% pay rise, which rose as high as 8% for the lowest paid employees and represented the most significant pay increase in 20 years.

However, the CWU commented its members deserved a salary increase to match inflation and avoid a real term pay cut.

The organisation pointed out that BT CEO Philip Jansen received a 32% pay rise last year to £3.5 million, making 86 times the average BT worker salary.

“Our members worked tirelessly to keep the company going and keep the company connected throughout the pandemic,” said a CWU spokesperson.

“Without our BT and Openreach members, there would have been no home working revolution. They deserve a proper pay rise, and that’s what we’re fighting for.”

A BT spokesperson commented earlier in August: “We know that our colleagues are dealing with the impacts of high inflation and, although we’re disappointed, we respect their decision to strike.”

“We have made the best pay award we could and we are in constant discussions with the CWU to find a way forward from here. In the meantime, we will continue to work to minimise any disruption and keep our customers and the country connected.”

FTSE 100: stocks regain ground after Jackson Hole shock

Natasha Doris
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FTSE 100: stocks regain ground after Jackson Hole shock

The FTSE 100 recovered slightly from the shock of US Federal Reserve chair Jerome Powell’s comments last Friday, gaining 0.2% to 7,441.9 by lunchtime on Tuesday.

“The FTSE 100 started on the front foot after the Bank Holiday, having careered into the long weekend with some substantial losses after Federal Reserve chair Jerome Powell’s hawkish speech at the Jackson Hole summit,” said AJ Bell

“It helps that US stocks have stabilised to some extent in the interim. Unsurprising given that many expected Powell to pour a dose of cold water on the idea that a so-called ‘dovish pivot’ was on the way.”

Indeed, US futures recovered some ground in pre-open trading, with the Dow Jones gaining 0.7% to 32,305, the S&P 500 rising 0.9% to 4,068 and the NASDAQ climbing 1.2% to 12,644.7.

Pound weakens against Dollar

The FTSE 100 was aided by a weakening in the Pound against the Dollar, as Powell’s hawkish stance spurred an abandonment of stocks, knocking the currency down with the markets shakeup.

“Helping the FTSE 100 is strength in the dollar relative to sterling – will forex traders be eyeing the possibility of parity between the pound and its US counterpart? A similar fate to that which befell the euro recently,” said Mould.

“It would take a big move to get there but as the energy crisis continues to grip the UK it doesn’t feel like a scenario where you could rule anything out.”

“A weak pound is typically good news for a FTSE 100 index which is heavily dominated by overseas earners.”

Europe energy crisis

European markets regained some losses, despite Russian energy firm Gazprom’s approaching shutdown of the Nord Stream 1 pipeline between 31 August and 2 September for apparent maintenance works.

The unscheduled upheaval is set to exacerbate an already critical energy crisis plaguing Europe, as countries across the continent brace for a difficult winter amid Russia’s gas supply deficit.

“Putin’s use of Russian gas supplies as a proxy front in the current conflict with Ukraine continues to add to the supply pressures in the energy market and ramps up the pressure as winter starts to approach,” said Mould.

The German DAX rose 1.7% to 13,123.2, the French CAC gained 1.1% to 6,291.2 and the Italian FTSE MIB increased 1.5% to 22,184.7.

Dechra Pharmaceuticals

Dechra Pharmaceuticals shares soared to the top of the FTSE 100 with a 3.6% climb to 3,566p following its reported acquisition of US veterinary pharmaceutical group Med-Pharmex for £221.5 million.

“I am delighted that we have completed the acquisition of Med-Pharmex, a company that I have been in dialogue with for a number of years,” said Dechra Pharmaceuticals CEO Ian Page.

“The US market is highly consolidated, therefore this is a unique opportunity to add several new products to our portfolio, enter the US FAP market and improve the manufacturing footprint for our North American business.”

Bunzl

Bunzl shares fell 5.9% to 2,931, hitting the bottom of the index after its results disappointed investors.

The company announced a 16.1% revenue growth to £5.6 billion on product cost inflation and acquisitions across the HY1 2022 financial term.

However, despite a raised operating margin outlook, its FY 2022 result is expected to drop slightly against FY 2021.

Grocery purchasing power fallen 9-10% since 2019, according to study

Natasha Doris
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Grocery purchasing power fallen 9-10% since 2019, according to study

Consumer purchasing power in the grocery sector has fallen approximately 9-10% since 2019, according to a recent study by TradingPedia.

The study found the total price of groceries rose 22.6% between August 2019 and August 2022, against a climb of 13.5% from £538 to £611 in the average weekly earnings of all UK employees between June 2019 and June 2022.

According to researcher Brian McColl, a basket of 55 items purchased from Tesco would have cost £109.89 in August 2019. However, the same basket of items currently amounts to £134.76 at checkout.

Food items including Tesco Finest white loaf rose 36.3% in price from 99p to £1.35, while chicken breast portions increased 10.5% from £3.80 to £4.20 and Tesco British unsalted butter climbed 16.6% from £1.50 to £1.75.

The price tag on branded items soared, with Hellmann’s mayonnaise spiking 70% from £20 to £3.40, Clover lighter spread rising 140% from £1 to £2.40 and Doritos tortilla chips more than doubling in cost with a 102% surge from 99p to £2.

Analysts at Citigroup currently estimate food price inflation will peak at approximately 20% in Q1 2023, while producer price inflation will keep accelerating.

Recent reports by the Institute of Grocery Distribution estimate a 15% peak in food inflation in summer 2022, with grocery costs expected to remain high heading into 2023.

“Food price inflation is very likely to mount greater upward pressure on wage demands compared to other types of inflation. And that is quite a concern for Bank of England policy makers, because considerable wage increases may also drive overall inflation,” said TradingPedia analyst Michael Fisher.

“Still, on a more positive note, Bank of England expects inflation to begin moderating in H1 of 2023 and ultimately return to its inflation target at some point during the second half of 2024”

Uniphar gross profits climb to €146m on strong performance across all divisions

Natasha Doris
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0
Uniphar gross profits climb to €146m on strong performance across all divisions

Uniphar shares gained 1.7% to 302.5p in late morning trading on Tuesday, after the company reported a 2.8% revenue increase to €991 million in HY1 2022 against €964 million the year before.

The firm announced an 8.8% gross profit climb to €146 million compared to €134 million, alongside a gross profit margin rise to 14.7% from 13.9%.

Uniphar noted a gross profit increase across all divisions, including outperformance in Supply Chain & Retail with a 5.2% organic growth.

Meanwhile, pre-tax profits before tax excluding exceptional items soared 9.9% to €26 million against €123 million in HY1 2021, despite inflationary headwinds.

Uniphar highlighted a 9.2% EBITDA growth to €44 million against €41 million, and a 6.2% operating profit rise to €25 million from €23 million.

The group noted a net bank debt of €73 million compared to €30 million year-on-year.

The company confirmed a basic EPS of 5.9c from 5.7c in the previous year, and an adjusted EPS of 8.4c against 7.1c.

“The Group has performed strongly during the period delivering Adjusted Earnings per Share growth of 18%. Each division has delivered organic gross profit growth, underpinned by a strong team performance across the board, with an outperformance in Supply Chain & Retail. The Group has leveraged its scale and diverse service offering to help mitigate inflationary pressures which continue to be a challenge across the globe,” said Uniphar CEO Ger Rabbette.

“Additionally, we have completed the acquisition of Orspec Pharma, marking our entry into the strategically important Asia-Pacific region. Orspec, headquartered in Australia, will support our goal of becoming a global leader in Product Access services through the provision of Expanded Access Programs and the delivery of unlicensed medicines.”

“We remain confident and are on track to achieve our strategic objective of doubling 2018 pro-forma EBITDA within five years of IPO”

Uniphar recommended an interim dividend of €0.0061 per ordinary share.

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