Experian Q1 revenues grow 7%, on track to meet FY revenue expectations

Natasha Doris
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Experian Q1 revenues grow 7%, on track to meet FY revenue expectations

Experian shares were up 1.5% in early morning trading on Thursday after the company reported a 7% revenue growth at actual exchange rates and a 9% rise in constant exchange rates in its Q1 2023 trading update.

“We grew strongly in Q1, in line with our expectations, underpinned by our portfolio diversity and growth initiatives,” said Experian CEO Brian Cassin.

“Total revenue growth was 7% at actual exchange rates and 9% at constant exchange rates. Organic revenue growth was 8%.”

Experian highlighted an 8% revenue climb in North America, 30% in Latin America, a 6% drop across the UK and Ireland, an 8% slide in Europe, the Middle-East, Africa and the Asia-Pacific, and a total global revenue growth of 7% at actual exchange rates.

The firm mentioned 65% of its revenue was linked to North America, with ongoing strength in bureau volumes, positive demand for analytics and software, expansion in health, targeting, automotive and verification services, alongside continued momentum from consumer services.

Experian noted 13% of its revenue came from Latin America and was driven by contributions from acquisitions in fraud and identity management, consumer services with an organic revenue of 42%, and from its new bureau in Chile.

It also reported strong performance in its Limpa Nome credit collection marketplace and credit comparison marketplace.

The company pointed out weakened macro-economic factors in its UK and Ireland business, yet drew attention to a 6% organic growth in its B2B operations reflecting new business traction and progress in consumer credit, business credit and fraud and identity management segments.

Meanwhile, Experian reported weak macro-economic conditions across the EMEA and Asia-Pacific regions, and commented it continued to focus on strategic markets where it could drive scale and enhance operating efficiency.

The information services group confirmed its expectations for FY 2022 remained unchanged, with an anticipated organic revenue increase of 7% to 9% and total revenue growth of 8% to 10% at constant exchange rates.

Anglo American launches steel decarbonisation partnership with Nippon Steel

Natasha Doris
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Anglo American launches steel decarbonisation partnership with Nippon Steel

Anglo American shares were down 1% to 2,657p in early morning trading on Thursday following its announced partnership with Nippon Steel to decarbonise the steelmaking process.

The two companies reportedly signed a Memorandum of Understanding (MoU) in a move to research methods to optimise premium lump ore produced by Anglo American’s mines to decrease emissions created using the traditional blast furnace steelmaking process.

Anglo American commented the partnership would study the use of its iron ore in a more carbon-efficient direct reduction iron (DRI) steelmaking method.

The mining firm claimed the DRI method was estimated to generate significantly lower emissions than the established way of blast furnaces and basic oxygen furnaces.

The partnership follows Anglo American’s October 2021 Climate Change Report, which included an aim to reduce Scope 3 emissions by 50% by 2040, building on previous commitments made earlier in the year.

The company said it recognised the steel value chain as key to hitting its goals due to the bulk of its Scope 3 emissions coming from the process.

Anglo American noted its report outlined a holistic approach to achieving its target, and involved working with customers to accelerate the decarbonisation programme across multiple layers to develop high quality products to lower rates of emissions.

“This agreement is an important component of Anglo American’s approach to collaborating with our customers and helping to shape a greener future for the backbone of global infrastructure – steel,” said Anglo American marketing business CEO Puter Whitcutt.

“By working together, we can drive towards system-level decarbonisation and pave the way for sustainable steelmaking, underpinning the steel industry’s full potential as an enabler of society’s wider economic prosperity and social development.”

“We look forward to collaborating on this important work with Nippon Steel, with whom we have a relationship that spans more than five decades, combining our expertise for more efficient and less carbon intensive production processes.” 

ValiRx plans to in-licence potential breast cancer treatment

Andrew Hore
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ValiRx plans to in-licence potential breast cancer treatment

Cancer treatments developer ValiRx (LON: VAL) says that it wants to in-licence a triple negative breast cancer project undertaken by King’s College London following a successful evaluation.

The share price jumped by 20.9% to 13p, although the share price is still 64.1% lower than at the start of the year. At the turn of the month, ValiRx raised £2.5m at 10p a share.

The evaluation confirmed the impact of a peptide drug candidate against triple negative breast cancer. This took nine months and “there is good evidence of biological activity. There are also signs that it could work for ovarian cancer cells.

Commercial terms have been pre-negotiated, and the project will be put into a new subsidiary. The evaluation cost around £75,000. Pre-clinical work on the project could cost around £500,000.

Cenkos expected ValiRx to have net cash of £817,000 at the end of 2022, but that was before an additional £1m was raised. That should be enough to fund the pre-clinical trial and to finance the rest of the business well into 2023. Although, it may depend on how other projects progress.

There are three potential treatments for cancer and sepsis that have partners or where one is being sought. A potential endometriosis treatment (VAL301) will be starting pre-clinical studies. This is a re-purposed version of the molecule used in the VAL201 potential prostate cancer treatment, where there is a letter of intent with TheoremRx.

There are two other potential assets. There is an agreement with the University of Barcelona concerning the investigation of drugs that can be used against Kirsten Rat Sarcoma Virus dependent cancers, such as uterine or pancreatic. There is around eight months to go on this programme and it will cost up to £100,000. There is also an agreement with Hokkaido University in Japan to evaluate a drug candidate for endometrial, pancreatic and bile duct cancers. There is another six months to go and it will also cost up to £100,000.

Loungers hits record 203% revenue surge to £237.2m, celebrates 200th site opening

Natasha Doris
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0
Loungers hits record 203% revenue surge to £237.2m, celebrates 200th site opening

Loungers shares gained 3.2% to 188.5p in late afternoon trading on Wednesday after the group announced a record revenue surge of 203% to £237.2 million compared to £78.3 million in FY 2022.

The company reported an adjusted EBITDA rise to £53.6 million against £13.9 million, along with an adjusted EBITDA margin of 22.6% from 17.8%.

Loungers swung back to an operating profit £28.4 million compared to a loss of £7.7 million and an adjusted operating profit of £34 million from a loss of £3.9 million in the previous year.

The group further highlighted cash generated from operating activities of £69.6 million from £12 million.

The firm also reduced its non-property debt by £33.2 million to £1 million, significantly shoring up its balance sheet.

The company opened a new record of 27 sites across the UK, with its 200th site recently opened for the public.

Loungers grew its build teams to five, marking the capacity to open approximately 32 sites per year.

The company added it was optimistic regarding its outlook, with no observed change in customer behaviour despite macro-economic headwinds, and the group said it was on track to hold at least 500 sites across the UK, alongside its strong pipeline of developments in the future.

“These results demonstrate the extent to which Loungers has thrived over the past year, achieving a record number of openings, record underlying like for like sales growth and a record level of profits,” said Lounger CEO Nick Collins.

“We are benefitting from changes in consumer behaviour, with more people staying local, working from home, and supporting their local community and high street. We are delighted to have just opened our 200th site, and to be announcing today that we are increasing our roll-out target for site openings to 30 for this year.”

“Whilst the short-term economic outlook is challenging, we are in an excellent position to weather the storm and to take advantage of growth opportunities coming out of it. We have a strong balance sheet, a very capable and highly motivated team and an affordable, value for money all-day offer with enormous scope for further expansion across the UK.”

Loungers mentioned an EPS of 17p after a loss per share of 10.9p in FY 2021.

FTSE 100 falls as US inflation hits 9.1%

Natasha Doris
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FTSE 100 falls as US inflation hits 9.1%

The FTSE 100 was down going into the close Wednesday despite a reported 0.5% growth in the UK economy over May, according to figures released by the ONS today.

However, the real driver of markets of Wednesday was the higher than expected US CPI reading that rose to 9.1%.

“If anyone had been harbouring hopes that US inflation had topped out at 8.6% those hopes have been dashed today. A potent mix of soaring prices both at the pump and at food stores has created a situation that no-one can hide from,” said Danni Hewson AJ Bell financial analyst.

“Markets will now have to lock in the expectation that the Fed will deal out another 75 basis point hike later this month as it seeks to push the lid down on the pot that just keeps bubbling over. There’s been plenty of volatility as investors consider how fast the economy will slow once the brakes are tapped again.”

US Inflation hits 9.1%

The spike marked the highest yearly gain in inflation since 1981 and the highest monthly gain since 2005.

The NASDAQ fell 0.6% to 11,189, the Dow Jones dropped 0.7% to 30,739.6 and the S&P 500 was down 0.7% to 3,790.

UK economy

Despite the positive news after two consecutive months of GDP contraction in March and April, the sectors behind the growth displayed less reason for optimism.

The GDP climb was predominantly on the back of a 0.4% rise in services, linked to a 1.2% increase in human health and social activities due to a higher level of GP appointments.

Meanwhile, output in consumer-facing services dropped by 0.1% as a result of a 0.5% fall in the retail sector, demonstrating a lack of household retail spending and sending recession alarms ringing.

“Households are strategically cutting back on their spending, which is a particular blow to the consumer services which still haven’t been able to get anywhere near their pre-pandemic glory days,” said AJ Bell financial analyst Danni Hewson.

Fashion groups felt the cold chill of the cost of living crisis, with JD Sports Fashion falling 1.9% to 122.8p and Next dipping 0.1% to 6,296p as consumers cut back on retail expenses.

Supermarkets also felt the effects of consumers paring back on shopping, with Tesco dropping 0.9% to 257.3p, Ocado falling 4.5% to 793.6p and Sainsbury’s sliding 0.1% to 214.9p.

Euro falls below parity against Dollar

Meanwhile, the Euro fell below parity against the Dollar for the first time in two decades, after the US inflation statistics served to strengthen the Dollar.

The Dollar was worth 0.997 Euro at the time of reporting, marking the first time since 2002 that the Dollar was listed as the stronger currency against the Euro.

European markets fell across the board, with the German DAX down 1.2% to 12,740, the French CAC 40 sliding 1% to 5,980.2 and the Italian FTSE MIB dropping 1.1% to 21,241.3.

Renold rebounds from Covid-19 with £195.2m revenues

Natasha Doris
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0
Renold rebounds from Covid-19 with £195.2m revenues

Renold shares were down 3.1% to 27.2p in late afternoon trading on Wednesday following a reported revenue of £195.2 million in FY 2022 against £160.8 million in FY 2021.

The industrial components company announced an adjusted operating profit of £15.3 million compared to £10.9 million the last year, alongside a 7.8% return on sales from 6.8%.

Renold lowered its net debt over the financial term to £13.8 million from £18.4 million after the group rebounded from the Covid-19 pandemic.

The firm highlighted a 31.7% growth in order intake to £223.9 million compared to £170 million and a closing order book increase of 57% to £84.1 million.

The company pointed out record revenue, order intake and closing order book in its chain Europe and Americas segments.

Renold also mentioned a £11 million long-term military contract among its operational highlights and a successful bolt-on acquisition in its chain sector, with payback of less than two years.

The firm noted an adjusted EPS rise of 87% to 4.3p compared to 2.3p year-on-year and a basic EPS of 4.7p against 2p.

Renolds added it believed the company would remain in a good position going forward in FY 2023, despite macro-economic headwinds and supply chain problems.

“Throughout the reported period the business performance has been on an improving trend and our order books have continued to grow in the early part of the new financial year,” said Renold CEO Robert Purcell.

“We are cognisant that there remain considerable Covid-19-related challenges in some parts of the world; supply chain issues are still prevalent and inflation is high.”

“However, we have entered the new financial year with good momentum and a belief in the excellent fundamentals of the Renold business upon which we are building.”

Computacenter acquires US reseller Business IT Source

Natasha Doris
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0
Computacenter acquires US reseller Business IT Source

Computacenter shares were down 2.4% to 2,432p in late afternoon trading on Wednesday after the group announced its acquisition of US value-added reseller Business IT Source for an unspecified figure.

Computacenter confirmed Business IT Source listed a revenue of $245 million with an EBIT of $8.9 million in FY 2021

The company reportedly employs approximately 100 workers and is based in Buffalo, Illinois.

Computacenter said the existing Business IT Source team would remain in the US as a separate operating unit within Computacenter United States in a bid to maximise the growth opportunity.

“Our US business continues to grow organically but we will take additional opportunities to improve our positioning,” said Computacenter Group CEO Mike Norris.

“BITS gives us a much stronger presence in the Midwest of the United States and brings some great people, customers and leadership to our business. The Buffalo Grove Integration Center will allow us to serve more of our Midwest regional customers locally over time, helping us to meet our sustainability goals.” 

“I am confident that the BITS leadership will seize the opportunity to continue their current growth momentum.”

The firm mentioned the business and team would be fully-integrated into Computacenter’s North American operations over time.

“We are excited to become part of the Computacenter family. This gives us the opportunity to provide a much broader range of capabilities to our customers and growth opportunities for our people,” said CEO & Co-Founder of BITS Bob Frauenheim

“Operating as a separate business unit will allow us to continue our personalized service while leveraging Computacenter’s capabilities to best serve customers and associates.”

Year of consolidation for Ilika before Stereax sales take off

Andrew Hore
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Year of consolidation for Ilika before Stereax sales take off

Battery technology developer Ilika (LON: IKA) has commissioned its manufacturing plant for Stereax batteries and there is significant interest from medical technology companies, but it will be another year until sales start to ramp up so investors will have to be patient.

Process optimisation and product qualification continues at the facility and then initial products can be sold for pre-clinical studies for medical technology products. Management has decided to focus on this sector rather than the sensors market. Sales will be slower building up, but the medical markets could be much bigger.

It could take five years to go from pre-clinical studies to mass production. The potential products include implanted medical devices, smart orthodontics and cardiac sensors. The potential pipeline is much larger than the capacity of the manufacturing facility. Licensing the technology could become a possibility in three years. A US supplier would be useful given the potential customer base.

Liberum is expecting a rise in Stereax revenues from £31,000 to £200,000 this year before a jump to £6m in 2023-24. That is slower than previously expected.

Meanwhile, the development of the larger Goliath battery for luxury electric cars continues. Ilika would be one of the few European producers of solid state batteries. Goliath batteries could achieve a level of performance in excess of existing technology by 2024. A pilot plant could be started next year with a larger scale plant likely at the UK Battery Industrialisation Centre later.

Cash

There is plenty of cash in the bank to undertake the investment required in both Stereax and Goliath battery technologies thanks to the £24.7m raised at 140p a share last July. Net cash is £22.6m and that could fall to £12.2m by April 2023 after which the cash outflows from operations and investment should start to reduce.

This year the loss is expected to fall slightly from £8.15m to £7.79m on revenues improving from £496,000 £1m – mainly due to greater grant income.

At 45.5p, down 10.8%, the share price is not much more than one-third of the placing and open offer price last year, which itself was a significant discount to the then market price.

The focus for Stereax on medical technology has slowed initial sales growth, but there are still enormous prospects for Stereax and Goliath. Investors got overexcited a few years ago and pushed up the share price but there appears an opposite overreaction in the current share price.

AIM movers: CMO downgrades guidance and Concurrent Technologies medical order

Andrew Hore
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0
AIM movers: CMO downgrades guidance and Concurrent Technologies medical order

CMO Group (LON: CMO) is the largest faller on the day having almost halved to 39p – last year’s placing price was 132p. The online retailer of building products says revenues in the 27 weeks to June 2022 are 10% ahead, or 2% higher like-for-like. Guidance is that full year revenues will increase from £76.3m to at least £86m, but previously £95.5m was expected. The EBITDA estimate has been reduced from £5.55m to around £3.7m – similar to last year. Supply problems have increased prices and trading has been getting tougher since Easter.

T42 IOT Tracking Solutions (LON: TRAC) has signed a distribution agreement in Argentina for its shipping container tracking systems with an estimated value of more than $16m over four years. That sent the share price 39% higher at 14.25p. The deal includes recurring revenues and sales should start in 2023.

Aeorema Communications (LON: AEO) says that the year to June 2022 was its strongest ever with a 130% jump in revenues and a pre-tax profit of at least £700,000. The live events agency benefited from the ending of Covid restrictions for in-person events and virtual events are continuing. There is £1.65m in the bank. The share price rose 27.3% to 70p.

Embedded computer boards supplier Concurrent Technologies (LON: CNC) has received a new order from a global medical technology company. The initial order is worth $2.2m in the first year of product shipments and there should be orders for several years. This further diversifies the customer base away from defence, which was 70% of the revenues of £20.5m in 2021. The share price is 9.4% higher at 81.5p and it is 5.2% ahead of the level at start of the year, which is a significant outperformance of AIM.

Drink brands owner Distil (LON: DIS) says first quarter revenues have decreased by 81% to £120,000. The share price dived 14.8% to 1.15p. Management says that there is a one-off impact from stock being removed from a distributor so that Distil can handle its own UK sales. Marketing spending is higher, and the benefits of the distribution change are not expected to show through until next year. Export sales increased.

Ironveld (LON: IRON) has raised £4m at 0.3p a share to finance the acquisition and refurbishment of Ferrochrome Furnaces Ltd and may raise up to £1m more. Directors’ loans and fees of £351,000 has been capitalised. Management has raised the cash because it is not certain that Grosvenor Resources will be able to complete the promised cash injection. Shareholder approval is required at a general meeting on 1 August. A time has not been set for the requisitioned general meeting to remove two directors. The share price fell 7.8% to 0.355p – having been 0.705p one month ago.

Itaconix (LON: ITX) increased interim revenues by 124% to $3m. This sparked a 11.4% rise in the share price to 6.85p. Revenues trebled from cleaning applications using the company’s plant-based ingredients, but beauty and hygiene revenues declined due to lower order volumes. That hit gross margin. There was $900,000 of net cash at the end of June 2022.

UK GDP, Wetherspoons, and Mode with Alan Green

UK Investor Magazine
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UK GDP, Wetherspoons, and Mode with Alan Green

Alan Green joins the UK Investor Magazine Podcast for our weekly instalment of markets and Uk equities.

UK GDP rose 0.5% in May dispelling fears about an impending recession, for now. The impact of bank holidays and a boost in travel spending drove the boost, despite ongoing fears of a cost of living crisis.

We look at the current playbook for inflation and a potential snap back in markets.

However, the boost in economic activity was missed by Wetherspoon that suffered a contraction in sales, albeit an improvement on prior quarters declines. The demographics of the Wetherspoon customer may be to blame as their core ale sales suffer while spirits grew.

Bitcoin app Mode has had a torrid year during the crypto crash and we discuss recent activity at the activity. Revenue nearly tripled in 2021 but increases in their expenses meant continued cash burn.

Golden Metal Resources is set for a spin out from Power Metal Resources and help crystalise valuation creation by the parent company. We outline the Golden Metal Resources portfolio and progress of the IPO.

Watch the Power Metal Resources investor presentation here.

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