AIM movers: Simec Atlantis Energy redeploys and Osirium Technologies shares continue to fall

Andrew Hore
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AIM movers: Simec Atlantis Energy redeploys and Osirium Technologies shares continue to fall

Simec Atlantis Energy (LON: SAE) has redeployed a 1.5MW turbine at its MeyGen site and this will help to increase tidal stream generation. The share price recovered 19.7% to 2.125p.

Jersey Oil & Gas (LON: JOG) has risen on the back of yesterday’s positive statement concerning farming-out the Greater Buchan area. Interest is apparently strong and there are serious discussions. This is the key project for Jersey Oil & Gas. Technical work should be completed in October. The shares are 15.2% ahead at 265p.

Electrolyser technology developer Clean Power Hydrogen (LON: CPH2) has made good progress since flotation in February and it has won two orders for 1MW electrolysers, as well as licence agreements around the world. There was still £23.2m in cash in the bank at the end of June. The shares were 9.2% higher at 44.5p. The placing price was 45p,

Egdon Resources (LON: EDR) has risen a further 5.52% to 7.65p after the ending of the government ban on fracking and Management says that it will work with the government to develop the regulatory environment.  

Coal miner MC Mining (LON: MCM) has been hit by profit-taking this week and it has fallen a further 21% to 24.5p today making it the worst performer. That is still well above the 16.5p that it was at the beginning of September.

Shares in cyber security firm Osirium Technologies (LON: OSI) continue to fall following yesterday’s interim figures showing an increased loss. The share price has fallen 25% to 3.75p – it was 6p on Wednesday. Revenues continue to grow and management I trying to rationalise its cost base.

Oil and gas project investor Reabold Resources (LON: RBD) has fallen following a meeting between the operator of the West Newton field and the community liaison group.  Reabold holds a 56% working interest in the West Newton field. The share price slumped 12.7% to 0.275p.  

Internet of things investment company Tern (LON: TERN) has published its interim figures. The portfolio companies are growing. The value of investments in FundamentalVR and Device Authority has increased, although there was a decrease in the Wyld Networks investment. NAV fell from 9.2p a share at the end of 2021 to 8.5p a share by June 2022. The shares fell 12.3% to 9p.

Red Rock Resources (LON: RRR) continues to fall following Wednesday evening’s placing raising £160,000 at 0.4p. This included 20 million warrants exercisable at 0.8p a share. Yesterday the share price fell to 0.425p. This morning the share price has slumped 11.8% to 0.375p. A joint venture of Red Rock Resources has acquired an exploration licence covering the former Berringa mine in Australia.

GBP/USD plummets towards 1.1000 after UK mini-budget

UK Investor Magazine
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GBP/USD plummets towards 1.1000 after UK mini-budget

GBP/USD was destroyed as sterling slid following the delivery Kwasi Kwarteng’s mini-budget aimed at supporting growth in the UK economy.

Despite a broad range of measures to help support tax payers and businesses, market choose to focus on the financial strain huge tax cuts and spending would put on the UK’s finances.

GBP/USD was down 2% at the time of writing, moving towards 1.100, a level not seen since for decades.

Kwasi Kwarteng chose to pile pressure on the UK’s finances at a time the Federal Reserve is projecting sharp interest rate hikes, causing a near capitulation in GBP/USD.

Analysts also pointed to the lack of transparency in today’s announcement, in as far as there were no forecasts on how Kwarteng’s decisions would impact growth, or finances.

“The decision not to present an independent health check on how well the country is placed to fund all this extra borrowing and all these headline grabbing giveaways has sent London markets and sterling tumbling. The pound’s fallen to its lowest level against the dollar since 1985 as big questions are asked about how expensive this gamble might really be,” said Danni Hewson, AJ Bell financial analyst.

Investing in European Farmland with Landex

UK Investor Magazine
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Investing in European Farmland with Landex

The UK Investor Magazine Podcast was joined by Kamel Belkadhi, the CEO at Landex. Landex is an investment platform that provides exposure to the asset class of farmland.

We discuss the benefits of farmland compared to property and commercial opportunities. Kamel outlines the dynamics of farmland investment and the yields available to investors.

Landex are currently raising funds on Seedrs and have already surpassed their €100,000 target. Find out more about their crowdfunding campaign on Seedrs.

Visit the Landex website here.

The companies benefitting from the Chancellor’s mini-budget

UK Investor Magazine
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The companies benefitting from the Chancellor’s mini-budget

Kwasi Kwarteng delivered his mini-budget as UK Chancellor on Friday and provided a broad range of support for the UK economy including tax cuts, schemes to support business investment, and measures to support household bills.

The Chancellor announced the biggest tax cuts in a generation and will reduce the tax paid by almost all UK tax payers and businesses.

The measures are a gamble future taxes will be supported by increased activity, while the government coffers take a battering in the coming years.

The markets nervousness around this strategy was demonstrated in UK 10-year Bond yields jumping as investor dumped UK bonds. The pound also sank to new lows against the dollar.

Although the UK governments decision to cut taxes will put pressure on the UK’s finances, investors will be aware of the numerous benefits for UK businesses in the short-term.

Housebuilders and Stamp Duty

The Chancellor provided a massive incentive for first time buyers to enter the market by raising the Stamp Duty threshold £300,000 to £425,000. For all other purchases the threshold is increased from £125,000 to £250,000.

“The horrendous cost of buying a house just got cheaper – at least for now. The stamp duty cut will ease some of the pressure on buyers right now. It’s particularly welcome as house prices rocket and interest rates continue to climb. But in the medium-term, it risks making life even harder,” said Sarah Coles, senior personal finance analyst, Hargreaves Lansdown.

Any measures to help stimulate the UK housing market will of course benefit the UK’s housebuilders. Taylor Wimpey, Persimmon, Barratt Developments and Berkeley Group all outperformed the heavily beaten down FTSE 100 on Friday.

Private and Early Stage Growth Companies

The Chancellor has set out his determination to support innovation and early stage enterprises. One of the measures Kwarteng took was to extend the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) beyond 2025.

These schemes are a vital part of spurring investment into exciting early stage companies by offering private investors generous tax benefits such as income tax relief, and exemption from capital gains tax and inheritance tax.

“The new Chancellor’s overt commitment to the Enterprise Investment Scheme and Seed Enterprise Investment Scheme could well be the single most important decision he takes during his time at 11 Downing Street,” said Andrew Aldridge, Partner at Deepbridge Capital.

“These world-class propositions are fundamental to the creation of the innovative companies of tomorrow.  Particularly within our specialist sectors of disruptive technology and life sciences, EIS and SEIS are key in ensuring the UK is globally recognised as one of the best places to start and scale business.”

Energy Companies

Although there were no direct measures to support energy companies, the move to support households with a £60bn package over the next six months confirms the government will finance the reduction in energy bills themselves, as opposed to levying a windfall tax on energy companies.

Hospitality loses out

As with all budgets, the measures supported the economy unevenly and while some sectors will reap the benefits, some sectors will be disappointed.

This mini-budget will do little to help a hospitality industry hoping for a VAT cut to help support them as energy bills soar.

The VAT cut is what businesses, particularly in the hospitality industry, had been crying out for to help see them through the energy and cost-of-living crises,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

“But there was no help coming from this direction, instead pubs bars and restaurants had to make to promises that corporation tax and alcohol duty won’t rise instead. Whitbread, the owner of Premier Inn, J D Wetherspoon and The Restaurant Group have fallen back amid the disappointment that more targeted support was not available.”

Baillie Gifford Shin Nippon board ‘disappointed by the weak performance’

UK Investor Magazine
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Baillie Gifford Shin Nippon board ‘disappointed by the weak performance’

Baillie Gifford Shin Nippon board have said they are ‘disappointed by the weak performance’ in the six months to 31 July 2022 as NAV per share fell by 4.8%, while the benchmark MSCI Japan Small Cap Index rose 0.9%.

The Baillie Gifford Shin Nippon share price fell by 9.9% as the discount to NAV widened.

During the period, Shin Nippon share price fluctuated from a premium of 1.5% to a discount of 8.9%, averaging a discount of 4.0%.

The Shin Nippon team attributed the underperformance to prior outperformance and weakness in internet and semiconductor related companies.

Baillie Gifford Shin Nippon’s top holdings include Torex Semiconductor, robotics focused Harmonic Drive and motorcycle manufacturer Shoei.

Japanese Economy

Baillie Gifford Shin Nippon is operating in an environment influenced by global inflationary pressures, yet one that has only seen Japanese inflation rise to 3%.

However, measures by the Bank of Japan to keep rates low – while most other major central banks are hiking – has led to a weakening Yen, and intervention to help strengthen the currency. A weaker Yen is not conducive to investment in smaller companies and the focus of the Shin Nippon portfolio.

Nonetheless, a 40% decline in Baillie Gifford Shin Nippon over the past year will leave not only the board feeling disappointed, but investors who have become accustomed to strong returns from the trust.

Baillie Gifford Shin Nippon has a total return of 308% over the past ten years.

Tekcapital’s MicroSalt to launch new foodtech products

UK Investor Magazine
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Tekcapital’s MicroSalt to launch new foodtech products

Tekcapital’s portfolio company MicroSalt is set to launch a new range of innovative low-sodium products designed to reduce the health issues associated with high salt intake.

High salt intake is thought to cause 100,000 deaths a year in the US alone and be a major factor in millions more cases of high blood pressure.

MicroSalt’s new products are set to compliment initiatives by governments in the fight against deaths caused by high salt, especially the FDA’s drive to help reduce sodium intake. The FDA has conducted comprehensive studies into the impact of sodium and found huge numbers of people consume too much sodium.

To help lower the intake of sound by Americans, MicroSalt® is launching its new table salt shakers that will be unveiled at Expo the East Food convention in Philadelphia with sales beginning 1st October.

MicroSalt will distribute the new products through UNFI, North America’s premier food wholesaler and will list on Amazon.

After launching in the US this year, focus will move to UK, Western Europe and Canada in 2023.

“We are proud to be able to bring such an essential product to consumers nationwide. Sodium is one of the leading contributors to hypertension and these shakers can help minimize the negative impact that excess sodium consumption has on human health,” says Rick Guiney, CEO of MicroSalt®.

Tekcapital shares jumped 6% in early trade on Friday.

AIM movers: Igas benefits from government statement and ex-dividends

Andrew Hore
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AIM movers: Igas benefits from government statement and ex-dividends

Igas Energy (IGAS) rose 13.6% to 88.6p and Egdon Resources (LON: EDR) 13.4% to 7.2p in response to the written ministerial statement on shale gas extraction. This made a commitment to more exploratory sites.

Palm oil producer Dekel Agri-Vision (LON: DKL) reported a decline in interim revenues, but pre-tax profit improved from €2.04m to €2.48m. Admin costs and interest charges were lower. Extraction rates improved from 21.4% to 22.4% and crude palm oil prices remain high offsetting lower crop yields. The cashew nuts operation is near to commencing processing. The shares are 10.3% higher at 3.2p.

Learning Technologies Group (LON: LTG) reported better than expected interims. Acquisitions boosted revenues and improved margins, but there was still organic growth in revenues of 5% – mainly from the software and platforms division. The share price has been weak this year, but it recovered 9.1% to 129.25p.

Director buying after yesterday’s interim figures from City Pub Group (LON: CPC) pushed up the share price by 8.7% to 62.5p – it was 53.5p on Tuesday. Finance director Holly Elliott bought 28,652 shares at 59p each and non-exec Neil Griffiths acquired 54,632 shares at 57.9p each.

Biome Technologies (LON: BIOM) is the worst performer today with interim revenues slightly lower than last year and the bioplastics is being hit by delays to customer launches. The share price has slumped 51.5% to 82.5pThis has led to bioplastics revenues forecasts being slashed. The RF technologies is trading well, and forecasts increased. The 2022 forecast loss rises by one-fifth to £1.1m with the figure helped by foreign exchange gains. The 2023 loss forecast has increased from £241,000 to £933,000.  

Safestyle UK (LON: SFE) had a tough first half to 2022 because of a cyber attack. That delayed price rises and pushed the replacement windows provider into loss. The hot weather hit the summer trading and TV advertising is going to be stepped up. That means that although Safestyle should return to profit for the full year, the forecast has been downgraded from £4.7m to £1m.  The share price fell 16.6% to 21.4p.

Just like fellow fuel cells developer ITM Power (LON: ITM) last week, Ceres Power (LON: CWR) has fallen sharply after its interim statement. Revenues and gross margin declined. There is still £221.6m of cash and investments. Licence fee revenues from the China joint venture are likely to be recognised next year. That means that second half revenues will be similar to the first half level. There was a 15.6% drop in the share price to 400.75p.

Late last night Red Rock Resources (LON: RRR) announced a placing raising £160,000 at 0.4p. This came with 20 million warrants exercisable at 0.8p a share. This morning the share price has slumped 15% to 0.425p.

Shares in medical imaging technology company Polarean Imaging (LON: POLX) have fallen after the FDA asked for more information from Polarean’s xenon-129 gas blend drug manufacturing partner. This relates to the recent inspection at its facility. Polarean says its partner will address the concerns. This will delay progress with the new drug application. The shares fell 9.1% to 50p.

Ex-dividends

Brooks Macdonald (LON: BRK) is paying a final dividend of 45p a share and the share price fell 25p to 2125p.

Churchill China (LON: CHH) is paying an interim dividend of 10.5p a share and the share price rose 15p to 1375p.

Driver Group (LON: DRV) is paying an interim dividend of 0.75p a share and the share price is unchanged at 32p.

Eckoh (LON: ECK) is paying a final dividend of 0.67p a share and the share price is unchanged at 40p.

Eleco (LON: ELCO) is paying an interim dividend of 0.2p a share and the share price is unchanged at 70p.

Epwin (LON: EPWN) is paying an interim dividend of 1.9p a share and the share price is down by 0.5p to 77p.

FIH Group (LON: FIH) is paying a final dividend of 2p a share and the share price is unchanged at 228p.

finnCap (LON: FCAP) is paying a final dividend of 1.15p a share and the share price is 1.45p lower at 15.5p.

FRP Advisory (LON: FRP) is paying a final dividend of 1.9p a share and the share price is down by 1p to 162.5p.

Gamma Communications (LON: GAMA) is paying an interim dividend of 5p a share and the share price is unchanged at 1112p.

Gateley (LON: GTLY) is paying a final dividend of 5.5p a share and the share price is 4p lower at 195p.

Hargreaves Services (LON: HSP) is paying a final and special dividend totalling 17.6p a share and the share price fell by 10.5p to 410.5p.

Keystone Law (LON: KEYS) is paying an interim dividend of 5.2p a share and the share price is 10p lower at 500p.

Mattioli Woods (LON: MTW) is paying a final dividend of 17.8p a share and the share price is 25p lower at 640p.

Mercia Asset Management (LON: MERC) is paying a final dividend of 0.5p a share and the share price

Portmeirion Group (LON: PMP) is paying an interim dividend of 3.5p a share and the share price

Property Franchise Group (LON: TPFG) is paying an interim dividend of 4.2p a share and the share price has fallen by 0.1p to 26.15p.

RBG Holdings (LON: RBGP) is paying an interim dividend of 2p a share and the share price fell 2.5p to 87.5p.

Robinson (LON: RBN) is paying an interim dividend of 2.5p a share and the share price is unchanged at 80p.

Somero Enterprises Inc (LON: SOM) is paying an interim dividend of 10 cents a share and the share price is down by 1.5p to 407.5p.

FTSE 100 recovers from worst levels as BoE hike rates

UK Investor Magazine
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FTSE 100 recovers from worst levels as BoE hike rates

The Bank of England has hiked rates by 50 bps to 2.25%, meeting analyst estimates, but disappointing some hawkish market participants.

In what has been a busy week for central bank action, the FTSE 100 had started the day on the back foot after the Federal Reserve raised US rates by 0.75% to 3.25%.

FTSE 100 recovers

The FTSE 100 had touched lows of 7,158 early on Thursday before recovering to trade 7,207 shortly after the decision to hike UK rates at midday.

Despite the shift in UK rates, the market’s focus will remain on the Federal Reserve and how they plan to raise US rates to help battle inflation.

“While the 75-basis point rise in US rates was largely expected, particularly after US inflation proved stickier than hoped in August, the messaging around the decision helped put markets in a tizz overnight,” says AJ Bell investment director, Russ Mould.

Although the Fed hiked rates by a bumper 0.75%, the main concern in markets was the future trajectory of rates and how much more stress the global economy was set to suffer in the future.

“The risks for financial markets are threefold. First, there remains uncertainty over when the Fed ends this rate hiking cycle. Second, the pace of the increase creates further risk for markets. Third, the economic consequences – which are experienced with a 12 to 18-month lag – will depend on the level and pace of hikes,” said Daniel Casali, Chief Investment Strategist at wealth manager Evelyn Partners.

JD Sports

JD Sports shares were the biggest casualty on the FTSE 100 after the sports retailer’s profits fell and they told investors the board were cautious on costs going through the rest of 2022. Despite revenue jumping, operating profit fell to £332.9m, falling from £396.8m in the same period a year prior.

JD Sports shares were 6.3% weaker at the time of writing.

Miners provided some support for the FTSE 100 as bargain hunters stepped in to pick commodities stocks that have felt the concerns around slowing growth and disruptions to the Chinese economy. Rio Tinto and Anglo American were both 1.3% to the good.

UK Banks

UK banks have welcomed the prospect of higher rates this week and the immediate reaction saw a dip in the UK’s banks, although they remained in positive territory.

Lloyds and Barclays were 0.3% and 0.6% higher at the time of writing, after being higher earlier in the session.

Sterling remains depressed as Bank of England hikes rates to 2.25%

UK Investor Magazine
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Sterling remains depressed as Bank of England hikes rates to 2.25%

The Bank of England raised rates by 50bps to 2.25% on Thursday, meeting economist expectations and providing little relief for sterling that traded at 1.1306 against the dollar.

Signalling a willingness to hike rates further in coming meetings, 3 of the 9 Monetary Policy Committee voted for a 75 bps hike, but this was not enough to see a strong rebound in sterling.

Sterling had hit the lowest levels since the 1980s on Thursday after the Federal Reserve hiked rates overnight. Following the Fed hiking by 0.75%, the big driver in GBP/USD was a strong dollar sparked by a shift in the outlook for US rates.

“Looking ahead, the US central bank raised its medium-term expectations for federal funds rates, now predicting that they will hit 4.4% by the end of this year and 4.6% by the end of 2023 against previous guidance of 3.4% and 3.8%,” said Derren Nathan, head of equity research, Hargreaves Lansdown.

Despite the hike in UK rates, the outlook for the UK economy and strength in the dollar is likely to put pressure on GBP/USD for sometime to come.

This was highlighted by former Bank of England voting member Danny Blanchflower who called the new UK Prime Ministers proposals ‘disastrous’ and said traders should ‘short the pound’.

EUR/USD craters to 20-year low as the Fed hikes 75 bps

UK Investor Magazine
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EUR/USD craters to 20-year low as the Fed hikes 75 bps

The Federal Reserve increased interest rates by 75 bps to 3.25% overnight as policy makers took steps to bring soaring inflation under control.

Actions by Jerome Powell’s Fed yesterday saw the dollar soar, sending the Euro well below parity and to levels not seen for 20 years.

The Euro is facing pressure of its own with an European energy crisis that shows no signs of abating in the short term, and the weakening Euro is going to only exacerbate their problems.

Indeed, the sharp pace of the Fed’s hiking cycle will send waves through the financial system, just at a time Europes economies are seeking stability.

“The risks for financial markets are threefold. First, there remains uncertainty over when the Fed ends this rate hiking cycle. Second, the pace of the increase creates further risk for markets. Third, the economic consequences – which are experienced with a 12 to 18-month lag – will depend on the level and pace of hikes,” said Daniel Casali, Chief Investment Strategist at wealth manager Evelyn Partners.

“With respect to the first two points, there is some guidance from the FOMC’s latest interest rate projections, which are released at the end of every calendar quarter meeting. The FOMC median Fed Funds interest rate forecasts (the so-called “DOTS”) of committee members rose to 4.4% (3.4% in June) for end-2022, 4.6% (3.8% in June) for end-2023 and 3.9% (3.4% in June) for end-2024. These forecasts indicate that US rates are set to rise further from here before falling in 2024.”

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