Cineworld shares have built a base around 3p following the announcement of chapter 11 proceedings earlier in September as they attempt to bring a $5 billion debt pile under control.
The filing for chapter 11 bankruptcy covers a $1.94 billion debtor-in-possession financing facility from existing lenders to ensure the group can continue to restructure the business while operations remain uninterrupted.
Cineworld operate 747 sites and 9,139 screens globally following the ambitious acquisition of Regal Entertainment.
A slow return to the cinemas by an audience adapted to consuming movies during COVID-19 has ravaged the business hoping for a strong bounce back from the pandemic.
In addition, a low number of blockbuster releases meant cinema goers had little impetus to return to the cinemas in a world now dominated by streaming services.
Cineworld reported $1.8bn revenue in 2021, up from $852m in 2020, but this hasn’t been enough to provide the necessary cashflow to support their debt commitments.
Indeed, a growing trend of films to going straight to streaming services such as Netflix, Disney and Amazon Prime has long signalled trouble for cinemas.
However, those cinemas providing and more rounded entertainment and leisure experience such as Everyman have managed to grow by focusing on food offerings in a more intimate setting.
Hilton Foods previously made the strategic decision to position themselves in the vegan and vegetarian markets are reaping the benefits.
Hilton Foods saw vegan and vegetarian volumes grow 40% per annum in the 28 weeks to 17 July 2022 over a three year period total group revenue rose 20.4% to £2,038.7m.
The higher sales volumes were enough to fend of a 30bps drop in operating margin to 2.0% as EBITDA grew 5.7% to £66.6m.
However, the issue for Hilton Foods was not the prior year, but how rising prices would impact profit going forward.
Hilton also warned volumes could suffer as a result of the cost of living crisis causing Hilton Food shares to give up a third of their value in early trade on Thursday.
Food Technology
Hilton Foods noted strong growth in their New Zealand markets as well as the rollout of a prototype food park in Sweden.
Hilton continues to focus on protein markets and are investing in UK cultured meat technology ventures in Cellular Agriculture Ltd.
“In the first half of the year Hilton has further strengthened its position as the international protein partner of choice. We have continued to focus on our strategy of diversification and differentiation, driving a further increase in volumes, sales and operating profit,” said Hilton Foods Chief Executive, Philip Heffer.
“At a time when inflationary headwinds have become more pronounced, we have made further progress in broadening and deepening our protein offer, while expanding our footprint across international markets. At the same time, we have made ongoing investment to ensure we lead in technology and automation, with sustainability central to everything we do.”
Corero (LSE: CNS) have ticked up to 10.75p after reporting interims to June. The highlights showed progress from this system supplier of cyber security solutions. It reported an EBITDA of $0.3m compared to a loss with turnover up 6% to $8.8m and attractively an increased gross profit margin to 88%. The effect on high margins on profits when revenue increases is the strawberry and cream of financial modelling.
CNS’s ‘flagship’ product is SmartWall, a niche solution defending against DdoS attacks in real-time. It defeats Denial of service attacks, which are...
UK affordable homebuilder MJ Gleeson has announced a solid set of results for the year to 30th June with profit before tax surging 33% as the company enjoyed record revenue for the period.
Revene rose 29.4% to £373.4m while completions hit 2000, up from 1,812 in the year prior.
MJ Gleeson were the beneficiary of higher average selling prices which rose 14.7% to £167,300, a trend observed across all housebuilders, including Redrow in their half year results yesterday.
The strong performance during the period has given the broad confidence to increase their dividend by 20% to 18p for the year.
“This is another excellent performance which reflects not only the strong operational capability of our business but also the continuing structural under-supply of affordable homes for first time buyers on low incomes,” said Dermot Gleeson, MJ Gleeson Chairman.
“As well as being affordable, our high-quality homes are also very energy efficient, costing significantly less to run than most houses in the UK, particularly in the rented sector. As a result, our homes are much sought after, and demand remains resilient.”
“Gleeson Land’s market remained robust throughout the year and the business delivered a strong result. Demand in the South of England for quality sites with sustainable and implementable residential planning permission remains strong and the division is well-placed to drive further sustainable growth.”
Critical Metals (LON: CRTM) has been readmitted to the standard list following the acquisition of 57% of Madini Occidental Ltd. The company also raised £1.8m in a placing at 20p a share.
Critical Metals floated as a shell in September 2020, when it raised £800,000 at 5p a share. Chief executive Russell Fryer was the main shareholder with a 38.4% stake. The strategy was to seek a reverse takeover in the natural resources development and production sector in Africa. The size of acquisition was expected to be between £500,000 and £3m.
The acquisition cost $750,000. Madini Occidental has an indire...
It has taken a long time, but it appears that Blackbird (LON: BIRD) is starting to reap the benefits of both its technology and its marketing initiatives. Blackbird remains loss making, although there is plenty of cash in the bank to finance investment.
The developer of real-time video editing technology can offer faster and easier cloud-based editing. Blackbird has AWS technology partner status. News and sports organisations use the technology. The first technology licencing deal will soon be delivered.
In the six months to June 2022, revenues increased from £867,000 to £1.55m, including £426,000 of non-recurring development revenues from deployment of the licence deal. Even excluding those licence revenues there was growth of one-third. However, rising investment in development and additional staff in sales and engineering pushed up costs. The underlying interim loss edged up from £879,000 to £898,000.
There was a cash outflow from operations and capital investment of £2.1m. There is still £11.6m in cash.
There are contracted and unrecognised revenues of £4.05m, which includes £768,000 related to 2022. Last year, revenues were £2.07m, so assuming these contracted revenues come through there will be strong growth in full year revenues. There are £1.47m of contracted revenues for 2023.
Existing clients are renewing, with IMG signing up for a further three years at a higher revenue level.
The share price fell 0.5p to 19.5p, which values Blackbird at £71.7m. That is still a heady rating given the level of revenues. The share price has recovered since April, but it is still below the 28p where cash was raised at the end of 2021.
Allenby is still not confident enough to set a 2022 forecast. Additional licence deals could provide a significant boost to revenues. Blackbird is still an attractive long-term investment.
CleanTech is targeting near-term Lithium production in hypersaline brine found beneath slats flats in Chile and South America’s ‘Lithium Triangle’.
The company is developing three projects that have the potential to provide future revenues that dwarf CleanTech’s current market cap.
This was demonstrated this week when the company announced a 22% resource upgrade to 1.51mt LCE at the Laguna Verde asset, just one of their three projects. To put this into perspective, the entire country of China has 1.5 MT lithium resources according to the United States Geological Survey.
Anticipation has been building around CleanTech Lithium’s next steps which is clearly evident in a share price that has rallied steadily over the past month. Having built a base around 20p, the CleanTech Lithium share price recently hit 60p as investors await further evaluation of their Chilean lithium projects.
CleanTech Lithium have a clear intent: to begin production of lithium by 2024. Such a defined goal has attracted investors who are clearly impressed with CleanTech strategy, as well as their assets.
Indeed, CEO Aldo Boitano suggested that CleanTech’s portfolio has the potential to make CleanTech Lithium a world-class producer in a recent Podcast interview with UK Investor Magazine.
Direct Lithium Extraction
Located in Chile and the ‘Lithium Triangle’ of Argentina, Bolivia, and Chile, CleanTech’s Laguna Verde and Francisco Basin assets permit Direct Lithium Extraction (DLE) from underground brine.
DLE production methods produce high grade lithium offtake and provide the producer with higher margins than those associated with hard rock extraction. This stems from the ability to harness renewable energy and lower labour costs.
CleanTech Lithium Assets
CleanTech have set about evaluating their assets and are in the enviable position of not yet knowing which of their assets has the potential to be their flagship project.
Laguna Verde
The Laguna Verde project is the most advanced asset with JORC compliant resource of 1.51MT LCE. The resource now also has Indicated and Inferred resources with the Indicated resource sitting at 0.803MT. Evaluating data from three drill holes revealed LCE at a grade of 206mg/L, with grades up to 409mg/L.
An upcoming Prefeasibility Study of the Laguna Verde project is set to use a base assumption of 22,000 tonnes of battery grade lithium production per annum over 30 years of operation.
Francisco Basin
The Francisco Basin project assays revealed lithium grades of 324 mg/L with an average grade of 305mg/L. We await their maiden JORC resource in the near future and broker Fox-Davies said they believe inferred resources could exceed 2m/t LCE in a recent broker note.
Llamara
To add to Franciso Basin and Laguna Verde, the Llamara project is undergoing a drilling programme which we will learn more from later this year. The CleanTech CEO has been quietly optimistic about the Llamara project, highlighting the sheer size of the license.
Fox-Davies believe within three years there could be in excess of 5MT resource, providing CleanTech Lithium’s investors with exposure to a world-class lithium company. Comparisons could be made with ASX-listed Lake Resources and their 4.4MT Kachi project.
Kachi is also located in the ‘lithium’ triangle in Argentina and will use DLE methods powered in part by solar energy. The Kachi Defined Feasibility Study (DFS) gave the project a $1.6 billion NPV.
Unique opportunity
Having secured licenses in the Chilean Salar de Atacama, or Salar Basin, the company has established an unrivalled presence in salt flats that have favourable characteristics that allow for higher margin lithium extraction that is difficult to achieve in hard-rock spodumene.
DLE yields high grade lithium that recovers more lithium content than hard-rock alternatives by using brine reinjection techniques that captures the lithium compound before pumping the result brine back into a reservoir.
The scarcity of available assets utilising this technique means CleanTech has secured some of the last licenses with the associated geological opportunities.
Indeed, DLE is somewhat experimental, and this is reflected in the company’s £44m valuation. However, there is still a significant disconnect from Lake Resources’ valuation that currently has a market cap of A$1.47 or £850m.
Underlining the future potential for the company and the CleanTech Lithium share price, broker Fox-Davies has a 114p 1-year target and 277p 3-year target. Shares in the lithium explorer are currently trading at 55p.
Naked Wines (LON: WINE) issued a business update after the close yesterday. It says that it is reviewing operational and financial plans in order to move towards sustainable profitability. Online buying of wine during lockdowns meant that there was a 2021-22 profit but Naked Wines is set to fall back into loss this year. Management reassures that the existing credit facility is not going to breach its covenants, but there is an indication that more funding may be required. Pratham Ravi, who is employed by a major shareholder, has resigned from the board having been appointed three weeks ago. The shares have dived 41.1% to 85.5p, which is 86.9% lower than at the beginning of the year.
More bad news from printed circuit technology supplier Trackwise Designs (LON: TWD) as it tries to renegotiate the large contract with a UK electric vehicle client. Production volumes will be even lower than previously expected and that is hampering the financing of capital equipment and leaving Trackwise Designs short of cash. The company hopes to secure an advanced payment from the customer, but further funding will be required. Trackwise Designs is seeking partners in certain sectors, including EV, medical and aerospace. The share price slumped 42.1% to 11p.
Immupharma (LON: IMM) has lost all its recent gains after its partner in the US received a written response from the FDA that includes guidance for the next steps of the clinical programme for Lupuzor as a treatment for Lupus patients, such as dosing and amending the study protocol. The shares fell 30.4% to 4.61p. There was a recent fundraising at 5p a share.
ITM Power (LON: ITM) chief executive Dr Graham Cooley will step down once a replacement is found. The electrolysers developer has a strong balance sheet thanks to a fundraising last year and a pipeline of potential contracts to add to those already signed. Revenues, though remain modest. ITM Power shares declined by 28.5%.
Reabold Resources (LON: RBD) says terms have been agreed for the sale of investee company Corallian Energy for £32m (320p a share). Reabold Resources will receive £12.7m from the sale, compared with a total investment of £7.5m. The cash can be reinvested in other oil and gas assets. Investors do not appear to be happy with the disposal price and there was a 21.7% fall in the Reabold Resources share price to 0.36p.
Inspirit Energy Holdings (LON: INSP) has issued a further update on its waste heat recovery system and its use in the marine market with Volvo. The initial trial produced a power output of more than 34kW. That can be doubled by using the Inspirit Helix Accelerator. Further trials are planned before entering a trial phase with Volvo Marine. There could be applications in the retrofit market for commercial engines. The share price has jumped 70.5% to 0.052p, but the share price tends to be volatile when announcements are made.
Tintra (LON: TNT) has signed a contract allowing it to integrate its customer identification technology with Temenos banking software. Tintra has also gained a fintech services licence in Qatar as it progresses towards being granted a banking licence. The shares are 10% ahead at 220p.
Safety and compliance services provider Marlowe (LON: MRL) has started the year well and revenues are 66% higher in the first four months. Organic growth is in high single digits. Cost savings from some recent acquisitions are going to be better than expected. There was a 8.1% recovery in the share price to 735p. The share price has fallen by more than one-quarter this year.
The latest inflation figures did little to cheer markets on Wednesday, after UK CPI fell to 9.9% in August, dropping below July’s 40-year record of 10.1%.
The FTSE 100 dropped 1.2% to 7,293.5 during lunchtime trading, dragged down by rising fears of higher interest rates and the aftershocks of Tuesday’s hotter than expected inflation figures of 8.3% for August, failing to meet analyst expectations of 8.1%.
US futures clawed back a slight amount of ground, with the NASDAQ rising 0.4% to 12,165.7, the S&P 500 increasing 0.3% to 3,965.2 and the Dow Jones climbing 0.2% to 31,300 in pre-open trading.
“Despite some of the key factors behind surging inflation easing slightly, many prices continue to go up and markets are not happy,” said AJ Bell investment director Russ Mould.
“With the 8.3% number for August higher than the 8.1% expected by economists, investors took fright and we saw an almighty sell-off on the markets, including a 5% decline in the tech-heavy Nasdaq index.”
Evelyn Partners chief investment strategist Daniel Casali added: “On the one hand, headline CPI inflation came in lower-than-expected, but the underlying core CPI measure remains stubbornly high, increasing the pressure on the Bank of England to raise interest rates by more than the 50bps expected by the Bloomberg consensus of economists when it meets on 22 September.”
EU calls for energy revenues price cap
Meanwhile, utilities stocks circled the bottom of the FTSE 100, after European Commission President Ursula von der Leyen called for a price cap on non-gas energy suppliers across the bloc to assist vulnerable families as the cost of living crisis and surging energy prices threaten to plunge households across the continent into a harsh, cold winter.
The revenues cap is expected to raise £121 billion, with the cap set to impact producers of low-cost power including renewables and nuclear.
Millions of Europeans need support to pay their energy bills.
Some companies produce electricity at low cost and make great margins.⁰ We propose a cap on their revenues that will raise more than €140 billion.
“In these times it is wrong to receive extraordinary record revenues and profits benefiting from war and on the back of our consumers. In these times, profits must be shared and channelled to those who need it most,” said von der Leyen in a statement.
United Utilities shares fell 3.6% to 143.8p, Severn Trent declined 3.6% to 2,684.5p, Centrica dropped 2.4% to 82.8p and National Grid decreased 2.2% to 1,055.7p.
Retail companies rise
However, retail companies gained on the relief of a less extreme cost of living crisis, sparking hopes of increased consumer spending.
Next shares rose 1% to 5,886p, JD Sports Fashion climbed 0.1% to 127.4p and Kingfisher increased 0.1% to 247.5p.
Oil receives boost
Oil companies enjoyed a boost to $93 per barrel in Brent crude after reports of bullish demand from the International Energy Agency (IEA), with the Agency expecting a large-scale switch from gas to oil projected to average 700,000 bpd from October 2022 to March 2023, doubling the rate compared to last year.
The positive news for energy groups follows estimations for growth in international oil demand to rise in 2022 and 2023 by the Organisation of the Petroleum Exporting Companies, which noted major economies were doing better than expected despite problems including spiking inflation.
Shell shares rose 0.1% to 2,331.2p and BP shares gained 0.3% to 463.1p.
C&C Group shares fell 3.6% to 167.5p in late morning trading on Wednesday following a reported a slowdown in on-trade momentum over Q2 2023 due to the impact of inflation on discretionary consumer spending in its pre-close trading statement.
The premium drinks company mentioned an expected HY1 2023 net revenue climb of 35% compared to last year, with expected net revenues of €900 million in the six months to 31 August 2022, broadly in line with comparable pre-Covid figures.
C&C Group also noted a projected operating profit range of €52-55 million against €16 million the year before and €64 million in HY1 2020.
The firm said trading through HY1 saw demand return “robustly” at the start of the term, however the impact of cost of living concerns resulted in a slowdown in trading momentum over Q2 2023.
Meanwhile, C&C Group confirmed an expected net debt to adjusted EBITDA of approximately 1.5 times at 31 August 2022, hitting its previously declared aim.
The company highlighted the further reduction in leverage multiple reflected the benefit of €43 million in proceeds from the first two tranches of three equal tranches from the sale of its interest in Admiral Taverns, along with good cash generation from the group over HY1 2023.
C&C Group added it intended to review the potential return of capital to shareholders including dividends in HY2 2023.
