Bunzl have released an upbeat trading statement and confirmed positive growth throughout 2022.

Bunzl said revenue in 2022 is expected to rise around 17% year-on-year with both inflation and the impact of acquisition pushing sales numbers up.

Looking forward into 2023, the group said they expect group revenue to be resilient and slightly higher than 2022.

“Bunzl’s performance over the year has continued to demonstrate the strength and resilience of the Bunzl business model. Our teams have successfully navigated the inflationary environment and supply chain disruption experienced this year to ensure customers have reliably received the essential products they need,” said Frank van Zanten, Chief Executive Officer of Bunzl.

“Furthermore, we have continued to deliver on key strategic objectives, including supporting customers with innovative products that are better suited to a circular economy and have had our ambitious carbon emission reduction targets approved by the Science Based Targets initiative (SBTi). In addition, we have committed more than £280 million of spend to acquisitions over the year, with our pipeline remaining active and supported by our strong balance sheet.”

MicroSalt is gaining significant traction in the roll out of their branded low-sodium salt shakers with an additional supermarket now partnering with MicroSalt for the distribution of their products through US stores.

Tekcapital portfolio company MicroSalt has announced Hannaford Brothers, the major US supermarket, will now be stocking both sizes of MicroSalt shakers.

“We are extremely excited that Hannaford Brothers has joined with us to provide low sodium solutions to its customers. This is a tremendous step in our march toward reducing excess sodium in the average diet. Our take-home shakers will let people salt their food to taste without excess sodium,” said Rick Guiney, CEO of MicroSalt®.

The development demonstrates the commercial progress MircoSalt are making ahead of a potential listing in London in 2023. MicroSalt announced just this week they had appointed Zeus Capital as their Nominated Advisor for the AIM float.

MicroSalt are fighting a global cardiovascular disease crisis that is being exacerbated high levels of salt in peoples diets. MicroSalt salt has 50% less sodium in than normal table salt.

While ‘strikes’ abound around the country, it is well worth noting just how well this group is doing by encouraging more strikes.

But then this company, which has just announced its results for the year to end September, feeds itself upon its customers enjoying strikes.

I am not talking about industrial disputes but instead in terms known by any efficient bowler.

The Business – fun, safe and family-friendly 

Capitalised at £393m, the Hollywood Bowl Group (LON:BOWL) is the UK’s largest operator of ten-pin bowling and mini-golf centres. 

Since the closure of its centres due to the Covid hassles, this group is starting to score well again.

With its headquarters in Hemel Hempstead, this company’s estate includes some 73 centres operating both in the UK and in Canada.

Its AMF and Hollywood Bowl brand-names are highly visible across the UK, while it goes under the Splitsville tag in Canada and under Puttstars for its mini-golf.

Each ten-pin centre, of which there are 69, is equipped with 24 bowling lanes, while the four mini-golf centres have three nine-hole attractions.

Its large, high-quality bowling centres are generally located in ‘out-of-town’ multi-use leisure parks close to cinema and casual dining sites and with large retail areas. 

Offering a complete family entertainment experience, each centre provides bowling lanes or mini-golf courses alongside its group on-site dining, licensed bars, and state-of-the-art family games arcades.

The group operates in quite a resilient part of the market, offering affordable low-price family entertainment.

It is well insulated from cost pressures, with its UK energy contracts into 2024. The group is managing to keep its prices low, while its headline price remains the lowest of all the branded bowling operators – with a family of four being able to bowl for less than £24.

A Strike or a Spare?

Just in case you are not up with ‘ten-pin bowling’ terms, please let me inform you.

When you bowl and knock down all ten bowling pins with your first ball, it’s called ‘a strike’. You get ten points for that, and then any pinfall points scored with the next two balls are doubled.

If it takes two balls bowled to knock down ten pins it is called ‘a spare’.

The Final Results and Outlook

The year to the end of September showed the group making excellent operational and financial advances, boosted by a programme of refurbishments, rebrands and new openings.

Total revenues rose to £193.7m (£129.9m), pre-tax profits £46.7m (£0.5m) while its net profit increased to £37.5m (£1.7m), generating basic earnings of 21.91p (1.05p) per share. 

The interim dividend was 3.00p per share, while the final is 8.53p together with a special dividend of 3.0p per share for the year.

Very encouragingly the group’s net cash position at the end of September was £56m (£29.9m) and an undrawn revolving credit facility of £25m.

On a sales per business basis the group makes around 49% from bowling, 1% from mini-golf, some 25% from amusements and about 25% from food and drink.

Looking ahead, the company sees a significant opportunity to grow its business to more than 110 centres across its three experiential leisure brands: Hollywood Bowl and Puttstars in the UK and Splitsville in Canada.

The company has continued the momentum from the last year into the start of the current financial year, with strong demand and encouraging pre-bookings for the Christmas period.

Conclusion – excellent upside for 2023

The group’s strong balance sheet and cash-generative business model, together with its resilience to inflationary pressures, will enable it to capitalise on its organic and international growth potential. 

The company’s shares in the last year or so have been as low as 161.5p, while its peak of 294p was scored in mid-January this year.

Currently trading at around the 230p level, the undervalued shares offer excellent upside for 2023.

Power Metal Resources has built a significant global portfolio of metals through their ‘Explore, Crystallise’ strategy which now spans North America, Africa and Australia.

In 2022, Power Metal’s strategy has had a notable focus on the growing demand for battery metals and minerals facilitating the clean energy revolution.

According to data from Benchmark Minerals, 300 new mines are needed by 2035 to meet demand for electric vehicles and battery metals.

These battery metals include cobalt, nickel and lithium – all constituents of the Power Metal exploration portfolio.

In addition to battery metals, Power Metal Resources is looking to nuclear energy and the potential increased demand for uranium.

Lithium

Lithium demand has become synonymous with the electric vehicle revolution and demand for the metal is set to enter a structural supply deficit within the next decade as EV manufacturing increases.

If demand has any chance of being met, a significant level of fresh lithium supply is required to come online through the establishment of new mines.

Power Metal Resources is planning to bring a number of these new mines to production as they undergo early evaluation of projects thought to hold economically viable lithium deposits.

These assets are located in Canada and Australia. They include the Selta Lithium Project in Australia, and the North Wind project and Authier North property in Canada.

Selta

The Selta project is held within Power Metal’s subsidiary First Development Resources. Power Metal Resources has a 58.59% interest in First Development Resources and the effort to list First Development in the near future is gathering speed. Selta is located in Australia’s Northern Territory and holds 700 potential outcropping pegmatites within a target area of circa 180km².

North Wind

The recently acquired North Wind project in Ontario has found anomalous lake sediment ranging from 18.63 to 34.95 ppm Lithium and is undergoing further studies.

Authier North

The Authier North Property borders licenses holding significant lithium resources. Sayona Mining’s (ASX:SYA) Authier project located to the south west of Authier North has a JORC compliant reserve of 17.1 Mt at 1.01% Li2O. Sayona’s project has a NPV of CAD$216 million and a pre-tax internal rate of return at 33.9%. Power Metal will hope similar mineralisation will be revealed as Authier North is explored.

Nickel

Power Metal Resources has a 27.91% interest in First Class Metals which has encountered high-grade nickel at their West Pickle Lake joint venture with Palladium One. Assays from drill hole TK-21-070 revealed exceptionally high-grade 3.1% Nickel Equivalent.

Power has been increasing their exposure to nickel and platinum group metals by upping their stake in the Molopo Farms project in Botswana. A drill campaign has encountered nickel sulphides with results up to 1.69% Ni and works continue to further evaluate the project.

Power Metal Resources also has a 35% interest in the Haneti nickel sulphide project in Tanzania through an investment in Katoro Gold. The Haneti Nickel Project is highly prospective for nickel and is undergoing an extensive drill programme.

Cobalt

Power Metal Resources’ cobalt exposure is achieved through projects already discussed in this article in the Haneti and West Pickle Lake projects. Cobalt is typically found alongside nickel in sulphide ores such as those encountered at the Haneti project and West Pickle.

Uranium

Power Metal Resources are one of just a few companies listed in London with any exposure to Uranium. Uranium is not a metal associated with EVs and battery storage, but a metal that will power the generation of clean energy from nuclear power plants.

Power’s uranium assets are located in the Athabasca Basin, Canada. Power has been attracted to the area by high-grade uranium mineralisation results of 1.09% U₃0₈ over 10.7m at Thibault Lake, grab samples up to 3.54% U₃0₈ in Cook Lake, as well as soil samples up to 13,200ppb U at the Tait Hill property.

These had already been discover and were made available to Power through geological databases including airborne magnetics and government bedrock mapping. Power has identified new potential targets and the project now has 12 prospective properties.

Petrofac shares were in freefall on Tuesday as the energy engineering services company feels the pain of delayed contracts due to the pandemic.

Petrofac’s Engineering and Construction (E&C) unit is expected to suffered a full year EBIT loss of approximately $190 million for 2022. This sharp loss is a result of uncovered commercial settlements and the overrun of legacy contracts caused by the pandemic.

The disappointing performance in the E&C unit means Petrofac now expect a $100 group loss in 2022 and a drop in revenue to $2.5bn. Petrofac recorded $3bn revenue in 2021 and $4bn in 2020.

The loss of revenue has been a constant worry for Petrofac investors and their shares are down 44% in 2022 after diving 9% today.

“It certainly seems that incoming CEO Tareq Kawesh has his work cut out for him at Petrofac. Whilst legacy issues at Engineering and Construction should have less of an impact going forward, it seems that the division won’t return to profitability next year,” said Derren Nathan, Head of Equity Research at Hargreaves Lansdown.

“And the units that performed well this year are not expected to generate the same returns in 2023. That said the pipeline of potential projects across the Group is very strong at $68bn, but as ever the key will be not just conversion, but also securing strong commercial terms.

“Pricing discipline is essential, to avoid a race to the bottom. Whilst New Energy is continuing  its momentum, Petrofac remains highly leveraged to the oil and gas market. The recent drop in prices means it will be making lower profits from its own  production, and any further deterioration could see its clients in the industry think hard about commissioning new projects.”  

Tekcapital have announced a significant step towards the initial public offering of their portfolio company MicroSalt® with the appointment of Zeus Capital as the Nomad for an AIM listing.

The announcement signals material progress in Tekcapital’s process to list the low-sodium salt company and raise capital to accelerate growth.

“We are very pleased to appoint Zeus as our Nominated Adviser and Broker, to assist MicroSalt in effectuating an AIM listing and to provide capital market guidance for our global growth strategy,” said Rick Guiney, CEO of MicroSalt®.

MicroSalt have already made notable progress in securing a number of partnerships and distribution channels including making their SaltMe crisps available in hundreds of Kroger stores in the US.

The MicroSalt IPO will be the next in a series of successful listings by Tekcapital that includes AIM-listed Belluscura and the NASDAQ listing of Lucyd earlier this year.

Tekcapital shares were trading up 6% at the time of writing.