The Euro took a hit as the energy crisis ravaged Europe, sending the currency down below parity with the dollar earlier today, with the Euro currently standing at 0.9974 against the US currency.
The dollar strengthened on expectations that US Federal Reserve chairman Jerome Powell would be announcing higher interest rate hikes at the upcoming Jackson Hole summit this week.
The Euro struggled amid the European energy crisis, as prices soared ahead of Russia’s three-day pause to the continent’s gas supplies through the Nord Stream 1 pipeline later this month.
Marechale Capital shares surged 8% to 3p in early afternoon trading on Monday, after the firm reported increased profits to £2.5 million in FY 2022 compared to £246,000 the last year.
The company announced a balance sheet rise to £3.6 million from £686,000, alongside a revenue of £622,000 against £400,000.
“During the last year Marechale has generated revenue of £622,000 (2021: £400,000), and, although our gross profit margin decreased from 64% to 53%, owing to higher third-party commissions, administrative expenses remained steady at £483,000 (2021: £463,000),” said Marechale Capital chairman Mark Warde-Norbury.
Marechale Capital confirmed its investments and warrants in client companies generated gains of £2.7 million compared to £412,000 the year before.
Marechale Capital mentioned further equity funding for Fast2Fibre and additional funding secured for The Forest Road Brewing Company among its FY 2022 highlights.
The company reported its hospitality clients were positioned to expand and capitalise on market opportunities, and its renewable energy and corporate clients continued to bring “strong return opportunities” for shareholders.
“It has been an active year in the hospitality sector as a number of businesses negotiated through the pandemic and Government restrictions; two years of market uncertainty have now been prolonged with the advent of war in Europe, which is compounding increasing inflationary pressures, and discretionary spending is being squeezed,” said Norbury.
“However, against this challenging backdrop, we believe that there are significant market opportunities for Marechale’s clients.”
“The Company has continued with its strategy of utilising its balance sheet to take enhanced positions in its client companies, and embarked on two small capital raises, welcoming Luke Johnson’s strategic investment of £160,000 in October 2021, and, secondly, raising a further £207,000 from shareholders and new investors in March 2022.”
The combination of a drop in oil and concerns about the upcoming Jackson Hole summit saw the FTSE 100 fall with global equities, although selling in London was more subdued than in US and European markets.
Reports over the weekend suggest that Iran and the US were getting close to a renewed version of the Joint Comprehensive Plan of Action (JCPOA), which could potentially see Iran scale back its nuclear programme and the west lift sanctions on exports from the country, including oil.
According to Al Jazeera, sources close to the matter said Iran would be permitted to export 50 million bpd within 120 days of signing the renewed agreement.
The price of Brent Crude slid in afternoon trading and saw the FTSE 100’s oil companies reverse early gains.
Jackson Hole
Meanwhile, markets eyed the upcoming Jackson Hole summit and US Federal Reserve chairman Jerome Powell’s latest views on the economy and interest rates.
“The Jackson Hole summit of central bankers and finance ministers is widely expected to see US Federal Reserve chair Jerome Powell take to the floor and puncture optimism which has built up over hopes the Fed may be nearing the point at which it pivots away from rate hikes,” said AJ Bell investment director Russ Mould.
“The event coincides with the PCE (personal consumption expenditure) measure of inflation, which the Fed often uses as a guide for its actions.”
“If this confirms the trend seen in the July CPI reading of a reduction in inflationary pressures then it might give investors some reason for renewed optimism.”
Markets across the Atlantic displayed pessimism, with the Dow Jones down 0.8% to 33,431 in pre-open trading, the S&P 500 falling 1% to 4,186.5 and the NASDAQ sliding 1.4% to 13,080.
Euro falls below parity with dollar
European markets saw the Euro take a blow, as the currency fell below parity against the dollar to hit a five-week low as concerns over a three-day pause on gas supplies across the continent later this month weighed on the markets as European electricity prices surged.
The dollar surged from strength to strength as the upcoming Jackson Hole summit sparked a five-week high on assumptions the Fed would hike interest rates higher to tackle US inflation.
EUR>/USD stood at 0.9993 at the time of writing.
The German DAX fell 1.7% to 13,311.7, the French CAC dropped 1.2% to 6,417.5 and the Italian FTSE MIB slid 1.3% to 22,221.4.
Australia-focused explorer Artemis Resources Ltd (LON: ARV) says no significant nickel or copper mineralisation was shown from drilling samples at the Osborne nickel prospect. The approach to exploration will be reassessed. The share price has slumped by 10.9% to 2.05p, although it is still higher than at the start of the month. Two drill holes at its Greater Carlow project have not shown any sign of mineralisation, but others have. A mineral resource estimate for Greater Carlow is expected in September and new targets have been identified. Two drill holes have been completed at the Apollo target at Paterson Central and it has re-entered a previous hole to drill deeper. This is near to the Greatland Gold (LON: GGP) Havieron project.
CyanConnode (LON: CYAN) shares have jumped 25.4% to 18.5p after receiving an order for one million Omnimesh modules for smart metering from India. This will nearly double the number of modules deployed in India. The modules will be deployed in Bihar, and this will take two years. There will be eight years of support and maintenance upon installation.
Base Resources Ltd (LON: BSE) announced a A$0.03 a share dividend along with its figures for the year to June 2022. The African mineral sands producer increased revenues by one-third to $279.1m and free cash of $59.4m was generated. The share price increased by 10% to 19.8p. Net cash was $55.4m at the end of June 2022. The dividend will distribute $24.4m of this cash. The mine life of Kwale has been extended to December 2024. The Toliara project in Madagascar has significant potential but fiscal terms are still being discussed with the government, which is delaying progress.
Corporate finance adviser Marechale Capital (LON: MAC) increased pre-tax profit from £246,000 to £2.56m in the year to April 2022. That was mainly down to an increase in the value of investments and warrants. Fundraisings by Future Biogas, which postponed an AIM flotation, Chestnut Group and the Burgh Island Hotel were all at a premium to Marechale’s existing holdings. There was a cash outflow from operating activities of £131,000. NAV increased from £686,000 to £3.63m, or 3.8p a share. The share price has risen 9.91% to 3.05p. Since the year end, Marechale Capital has helped Weardale Lithium raise money and it has an 8.5% stake in the company.
Data analytics services provider Rosslyn Data Technologies (LON: RDT) has signed up its first enterprise customer through digital procurement services provider Chain IQ. A Japanese bank has signed a five-year contract and Rosslyn will provide its procurement analytics platform. This is designed to help to reduce spending. This is the first potential client to become a customer, but there should be more via Chain IQ. The Rosslyn share price improved by 9.52% to 2.3p.
Contract research provider Open Orphan (LON: ORPH) has secured a £10.4m contract to manufacture a specific H1N1 subtype influenza challenge virus and a follow-on phase 2a human study from a top five global pharma company. This is the fourth study signed up this year. Challenge studies are carried out prior to much more expensive field trials. This latest contract will predominantly generate revenues in 2023. This provides greater visibility for next year. The share price rose 6.67% to 12p.
Credit Suisse announced the appointment of several new executives to its board on Monday.
The bank confirmed the appointment of Dixit Joshi as CFO, Francesca McDonagh as COO and Michael J. Rongetti as ad interim CEO of the Asset Management division.
Wealth Management division CEO Francesco De Ferrari has also been confirmed as CEO of Europe, the Middle East and Africa after serving in the role on an ad interim basis since January 2022.
Additionally, Michael Bonacker has been appointed as group head of transformation. He is scheduled to take up the position on 1 September 2022, and will report to McDonagh.
Joshi, McDonagh and Rongetti will report directly to Credit Suisse CEO Ulrich Körner.
Joshi is set to replace David Mathers on 1 October 2022, who will be resigning after over 11 years in the position. Joshi will re-join Credit Suisse after five years spent working at Deutsche Bank to overhaul the company’s balance sheet.
McDonagh will be moving from her previously announced position as CEO of the EMEA region to the role of COO, and is scheduled to start on 19 September 2022.
She is set to join the company from her most recent position as group CEO at the Bank of Ireland, following senior management roles as HSBC.
Rongetti will reportedly replace Ulrich Körner in the ad interim Asset Management CEO position with immediate effect, following Körner’s move to group CEO. Rongetti will also remain as head of asset management Americas and global head of investments and partnerships.
De Ferrari previously worked as ad interim CEO of the EMEA region, and is set to take over the position permanently with immediate effect.
“I am delighted to welcome Dixit, Francesca, Michael and Michael to their new roles. Dixit and Francesca are joining Credit Suisse with impressive track records, adding a wealth of experience at this important juncture,” said Credit Suisse chairman Axel P. Lehmann.
“All four are expected to drive our strategic and operational transformation into the future, with the clear objective to position Credit Suisse for a successful future and realize its full potential.”
Wizz Air shares fell 6.2% to 2,183p in late morning trading on Monday after the group announced CFO Jourik Hooghe would be resigning to “pursue opportunities outside the company.”
Hooghe said he would remain with the company over the transition period until 31 December 2022, after which he will reportedly be replaced by Ian Malin, who is set to join Wizz Air on 1 October 2022.
Malin will be based in Budapest, reporting to the CEO. Wizz Air confirmed he would be assuming responsibility for digital development, investor relations, financial planning and controlling, accounting and treasury.
Malin’s previous work experience includes time spent at KPMG, Allco Finance Group, Seabury, the AJW Group and Unical Aviation over the past 22 years.
“I am delighted to welcome Ian to the company. He joins at an exciting time as Wizz Air drives long term growth based on a deep aircraft order book and ambitious expansion plans in Europe and the Middle East. I look forward to working with him in the coming years,” said Wizz Air CEO József Váradi.
“I would also like to take this opportunity to thank Jourik for his contribution to the company over the past three years, probably the most challenging period for any airline CFO. I certainly wish him the very best for the future.”
Vodafone shares dipped 0.5% to 121.1p in early morning trading on Monday after the company announced a non-binding agreement for the sale of Vodafone Hungary for €1.8 billion to 4iG and Corvinus.
The deal is set to support the Hungarian state’s aim to create a national Information and Communications Technology (ICT) champion.
However, Vodafone’s shared services business VOIS is not penned for inclusion in the transaction, and will continue to provide services to its other operating companies.
Vodafone reported its Hungarian business, which is currently one of the leading converged network operators in the country, would become the second largest operator across mobile and fixed communications after its merger with 4iG.
“The Hungarian Government has a clear strategy to build a Hungarian owned national champion in the ICT sector,” said Vodafone CEO Nick Read.
“This combination with 4iG will allow Vodafone Hungary, which has a proud history of success and innovation in the country, to play a major role in the future growth and development of the sector as a much stronger scaled and fully converged operator.”
“The combined entity will increase competition and have greater access to investment to further the digitalisation of Hungary.”
The agreement is set to close pending due diligence, binding transaction documentation and regulatory approval.
Vodafone confirmed an intended completion date by the end of FY 2022.
The popular cinema chain announced it was currently searching for options to salvage the company, and were evaluating avenues to obtain additional liquidity and potentially restructure its balance sheet via a comprehensive deleveraging transaction.
Cineworld pinned the blame for its lacklustre balance sheet on a poor supply of big screen offerings, with major releases including Thor: Love and Thunder and Top Gun: Maverick failing to attract audience numbers back to the cinema post-Covid.
The Wall Street Journal reported the chain was considering a voluntary Chapter 11 filing for bankruptcy in the US and similar proceedings in other jurisdictions on Friday last week, citing sources close to the issue.
Cineworld commented: “Any such filing would be expected to allow the Group to access near-term liquidity and support the orderly implementation of a fully funded deleveraging transaction.”
“Cineworld would expect to maintain its operations in the ordinary course until and following any filing and ultimately to continue its business over the longer term with no significant impact upon its employees.”
“As previously announced, any deleveraging transaction would, however, result in very significant dilution of existing equity interests in Cineworld.”
Meanwhile, the franchise confirmed its Cineworld and Regal theatres would remain open for business, and would “continue to welcome guests and members.”
Kemeny Capital has issued a new note on Tekcapital highlighting the current value of their portfolio companies and the discount to their current market cap.
After what was a busy week for Tekcapital last week, their shares traded at a 29% discount to their portfolio companies’ NAV on Thursday.
As of the close 17th August, Kemeny Capital noted Tekcapital’s portfolio company NAV was £64.4m, based on the current market prices of Belluscura shares, and recently floated Innovative Eyewear.
Tekcapital’s 100%-owned smart eyewear company, Luycd, saw the NASDAQ IPO of Innovative Eyewear on Monday which valued Tek’s 71% stake at $39m. A couple of day’s trade in the open market saw Tekcapital’s stake valued at the equivalent of £29.1m, as of the close 17th August.
The Kemeny Capital note highlighted investors will likely be eagerly awaiting further commercial success from Tekcapital’s portfolio to gauge the future earnings trajectory of the companies, and any changes to current book value.
Chrysalis Investment shares decreased 3.5% to 84.2p in early morning trading on Monday, following its updated NAV report of 163.48p per ordinary share at 30 June 2022.
The NAV result represented a 22.8% decline since March 2022, with wefox, Klarna, Starling, Brandtech and Wise acting as the significant drivers behind the movement across the period.
The firm commented its valuations were negatively impacted by inflation and material interest rate rises. However, the group noted a “strong rebound” in equity markets and performance of listed peer benchmarks post period end.
Chrysalis Investments announced a balance sheet with £48 million in cash and £57 million in listed assets, making total liquid assets of 20.4% of current market cap.
The company mentioned several highlights over the financial term, including strong performance from Wise, offset by Revolution Beauty’s share price fall.
Chrysalis Investments also confirmed $1.4 billion raised in investments yeat-to-date, including Starling, Klarna and Featurespace, which the group noted were either profitable or considered funded through to profitability.
“We are encouraged that our NAV outturn was in line with the 23% NASDAQ decline in Q2, particularly when our second largest holding, which represented 19% of the portfolio at the beginning of the period, was marked down by almost 80%. The implied write down for the rest of the portfolio is approximately 8% which reflects strong trading, a positive funding round for wefox and the inherent downside protections we have structured into many of our investments,” said Chrysalis Investments co-portfolio managers Richard Watts and Nick Williamson.
“Equity markets have rebounded very strongly since the 30 June, and we note the very strong performance of some of the listed peers we benchmark our portfolio assets against. This has already been reflected in one of our portfolio assets raising primary capital at a premium to its previous funding round and should lead to future NAV progression, if these recent gains are sustained.”
“With over £48m cash and £57m of listed assets, which together represent 20.4% of the market capitalisation, Chrysalis is in a very strong position heading into H2 and we remain confident in the future potential of this portfolio and the outlook of the Company.”
