The FTSE 100 was up over 1% on Monday following a rebound in benchmark Brent Crude to $113 per barrel.
A rebound from last week’s heavy selling continued into Monday’ session as concerns over oil supply saw the energy complex rise, taking the FTSE 100’s oil companies with it.
Harbour Energy, BP and Shell shares rose 4.3% to 347p, 4.3% to 401p and 3.8% to 2,203.2p, respectively.
“A small bounce back in the oil price was enough to give BP and Shell a lift and provide welcome support to the FTSE 100 index,” said AJ Bell investment director Russ Mould.
“Oil supplies have been watched closely in recent weeks amid concerns about a slowdown in the global economy.”
“Fundamentally supplies continue to be tight and there is still enough economic activity to stop oil prices slumping. However, lingering recession fears could act as a ceiling on the oil price so we might not see the black stuff race ahead in value too much from current levels.”
The support oil can provide the FTSE 100 was highlighted by the stark difference in today’s performance of the German DAX – down 0.2% – and FTSE 100.
Global recession
The rise in UK stocks came even though warnings of a global recession continued with Larry Summers saying risk of recession are rising.
However, there is now an argument a recession is largely priced into stocks and central banks may not be as aggressive with rates rises through the rest of 2022 as previously thought.
ReNeuron Group shares were down 1.7% to 27.5p in early afternoon trading on Monday after the firm announced a revenue for the term of £403,000 linked to research and collaboration activities and royalty income in FY 2022 from £257,000 in FY 2021.
The company highlighted a loss for the year of £9.7 million compared to £11.3 million the year before, reflecting lower costs.
ReNeuron also noted reduced costs in the term of £11.6 million against £13.2 million, driven by lower research and development spending as a result of a decision to curtail clinical development activities.
The firm reported an increase in net cash used in operating activities of £7.4 million compared to £6.1 million, with the last year benefiting from the receipt of two research and development tax credits linked to FY 2019 and 2020.
The group mentioned cash, cash equivalents and bank deposits at 31 March 2022 of £14.5 million from £22.2 million in the previous year, providing a cash runway until at last mid-2023.
“During the period tough decisions have been taken, the business model re-focussed and the Board and Management team strengthened in line with our future goals,” said ReNeuron chairman Iain Ross.
“Personally, I have been most impressed with the competence, resilience and determination of the ReNeuron team and look forward to driving the business forward, executing a realistic plan and achieving meaningful milestones over the next 12 months.”
H&T Group shares were up 3% to 331.3p in late morning trading on Monday after the firm announced demand for pledge lending had continued to gather momentum in HY1 2022.
The pawnbroker reported its pawnbroking pledge book at 30 June 2022 was £84.2 million against £48.3 million in the previous year, with growth marked across all geographies.
The cost of living crisis has seen record numbers of customers turn to pawnbrokers in a desperate bid to match skyrocketing fuel costs and rising food inflation as the war in Ukraine and Covid-19 aftereffects cripple production supply chains.
H&T Group highlighted that pledge lending remained at record levels with incremental growth month-on-month over the financial term.
It noted lending volumes currently over 40% in excess of pre-pandemic levels, and a maintained average loan size, loan-to-value rations and redemption rates.
The company further mentioned its retail sales had been consistently strong and trading was in line with expectations.
H&T Group also commented its gold purchasing had remained buoyant, supported by a rising gold price which drove volumes and improved margins.
The firm said its foreign currency revenues had more than doubled in HY1 2022 as a result of international holiday travel returns, with transaction volumes almost returning to pre-pandemic levels.
“I am delighted with the progress we have made in the first half of 2022, and the momentum with which we enter the second half of the year. I look forward to updating the market fully when we report on the 9th of August,” said H&T Group CEO Chris Gillespie.
Tekcapital (LON: TEK) says that it is considering floating its Salarius subsidiary in London next year. This follows the first bulk order for MicroSalt from a business customer. Salarius is already selling SaltMe branded low-sodium snacks. MicroSalt is a low sodium product that produces salt crystals that are one-hundredth of the size of a normal salt crystal. This enhances the salt taste and reduces sodium consumption by 50%. The Tekcapital share price has risen 7.9% to 20.5p.
Nanosynth Group (LON: NANO) is progressing its partnership with Volz Holdings. This started with the production of surgical masks for Covid restrictions. Demand has fallen and the technology will be used in heating, ventilation and air conditioning markets. Nanosynth says trading continues to improve. The share price jumped 44.4% to 0.325p, making it the highest riser of the day.
Oil and gas producer Jadestone Energy (LON: JSE) has restarted production at the Montara field offshore Australia, which was paused due to a leak in a crude oil storage tank, on 3 July. This is earlier than expected. The tank has been temporarily repaired and the oil moved to other tanks. A permanent repair will start in a few days. The share price recovered 9.3% to 88.5p. This is still lower than prior to the revelation about the tank leak.
Immediate Acquisition (LON: IME) shares are rising ahead of the reverse takeover of new bank Fiinu on Friday – when the name will be changed to Fiinu Group (LON: BANK). Shareholders agreed to the acquisition on 1 July. The share price increased 11.3% to 18.5p.
Flexible electrical connectors manufacturer Strip Tinning (LON: STG) has won a glazing connectors contract for electric vehicles produced by BMW. There should be 16,000 connectors supplied each month for the BMW iX model. The contract starts before the end of 2022 and could generate revenues of $1.2m in 2023. Skoda is increasing its demand for connectors by 45% in another five-year agreement. The shares improved by 6.1% to 105p. That is still well below the 185p placing price when Strip Tinning joined AIM in February.
Omega Diagnostics (LON: ODX) has agreed heads of terms for the sale of the loss-making CD4 business to a preferred bidder. There should be a significant cash payment followed by a royalty stream on VISITECT CD4 test sales. The business was expected to generate £500,000 out of forecast group revenues of £11.6m for the year to March 2022. The continuing operations will focus on health and nutrition and a sale of CD4 should leave Omega Diagnostics with net cash at the end of March 2022. The share price edged up by 6.45% to 3.3p. That is below the recent placing and open offer price of 4p.
Filtronic (LON: FTC) has won a £400,000 aerospace and defence contract for the design and manufacture of microwave filters. This will be delivered this year and there could be follow-on business. There should be more contracts won in the sector in the coming months. The share price moved ahead by 7.45% to 12.625p.
Housebuilder and regeneration projects developer Inland Homes (LON: INL) has completed the sale of 85 units at Buckingham House, High Wycombe for a build to rent operator. In October 2020, the original deal was worth £21.3m and £2.1m was paid initially. The rest of the cash has been received and a further £400,000 has been generated from variations and the sale of an additional commercial unit. This will help to reduce debt. Even so, the share price fell 6.35% to 29.5p. Net tangible assets were 103.6p a share at the end of March 2022.
Alien Metals Investor Presentation at the UK Investor Magazine Summer Investor Evening June 2022.
Alien Metals CEO Bill Brodie Good provides a comprehensive overview of the Alien Metals portfolio with particular attention paid to the Hancock Iron Ore Project set to begin production in 2023.
Bigblu Broadband shares were down 3.8% to 50p in early morning trading on Monday, after the group reported a total revenue climb of 13.8% in HY1 2022 to £14.9 million compared to £13.1 million in HY1 2021.
The telecommunications firm announced a like-for-like revenue growth on a constant currency basis of 15.1% against 15.6% year-on-year, along with an adjusted EBITDA rise of 1.4% to £2 million from £2 million.
Bigblu Broadband mentioned an adjusted operating cash inflow of £1.3 million, remaining flat since the last year, alongside an adjusted free cash inflow of £400,000 against £300,000.
The company highlighted net cash of £4.5 million on 31 May 2022 from £4.1 million the year before, following the repayment of its debt in full and the return of capital to shareholders in the last financial term.
The firm noted a selection of operational high points, including a rise in total customers to 60,400 compared to 58,300 in the previous year, however it lost 500 customers as a result of a targeted cyber attack on its partnered operations in Ukraine.
Bigblu Broadband further mentioned its Australian business Skymesh had signed a partner agreement with Asia-Pacific broadband satellite operator Kacific Broadband Satellites Group to facilitate high-speed broadband internet service across the region, starting with New Zealand.
The group reported a slate of new customer acquisitions via its purchase of certain assets of Clear Networks in Australia in January 2022, strengthening its Australian presence.
The company also noted its recent distribution agreement with Telenor to provide broadband via wireless 5G delivering speeds up to 500 Mbps, however the operation was confirmed to be running six months behind schedule due to equipment shortages.
Bigblue Broadband reported some problems with its Quickline disposal to Northleaf for a cash consideration of up to £41.2 million, with up to £10.1 million in deferred payment contingent on several performance conditions being met by 22 May 2022.
The transaction included the agreement in PC1, to build 100 gigabit capable 5G masts passing 60,000 homes, and PC2, to secure over £10 million in subsidies.
Quickline said it had experienced supply chain difficulties, with the subsequent backlog resulting in only 41 new FWA masts and £2.6 million in new subsidies, which meant Bigblue Broadband received no deferred consideration from the agreement.
“We are pleased with the continued progress shown by the Group in the Period, and the efforts we have made to improve our offering in the Nordic region provides us with optimism that this region can return to growth. In addition, our Australian business continues to perform strongly,” said Bigblue Broadband CEO Andrew Walwyn.
“The Board’s focus will be on continuing to ensure it can maximise shareholder value from its continuing operations.”
“Overall, the Company continues to trade in line with expectations and, with extensive experience in the sector and a proven track record of building attractive businesses to deliver shareholder value, the Board remains confident in its ability to ensure it can continue to deliver attractive returns for shareholders from its operations in Australasia and the Nordics.”
Spirax-Sacro Engineering shares were up 2.5% to 10,315p in early morning trading on Monday following its announced negotiations to acquire the Vulcanic group of companies from French private equity firm Qualium for £225.5 million on a cash and debt-free basis.
Vulcanic operates as a European industrial electric heating group, and is currently the largest supplier of bespoke industrial heating solutions across the continent.
The company is based in France and holds 10 manufacturing facilities internationally with over 700 employees, of which 90% are situated in Europe, the Middle-East and Africa.
Spirax-Sacro Engineering confirmed Vulcanic would support the delivery of growth in the manufacturing group’s Electric Thermal Solutions (ETS) business through existing customers, products and operational footprints to complement its existing Chromalox business, which is predominantly based in the Americas.
The engineering firm added that Vulcanic would support Spirax Sacro Engineering’s drive to help customers decarbonise their critical industrial processes via electrification, building on high demand already present among European customers.
Spirax-Sacro commented the acquisition of Vulcanic was expected to be accretive to its earnings in FY 2022.
The group noted that the regulatory conditions of the merger were scheduled to close by Q3, with the consideration to be financed through an acquisition bank facility.
Vulcanic reported revenues of £76.8 million in FY 2021, along with an EBITDA of £15.2 million and an EBIT of £13.8 million on an adjusted pro-forma basis for the financial term.
The company confirmed gross assets of £186.8 million for 2021, including goodwill from previous Vulcanic acquisitions.
“We are looking forward to welcoming colleagues from Vulcanic into our Group. We have been following Vulcanic for some time and believe the acquisition represents an excellent opportunity to broaden our addressable market and further deploy our industry leading technologies in Europe,” said Spirax-Sacro Engineering CEO Nicholas Anderson.
“Vulcanic’s existing strength and scale in Europe – with further investment by our Group – will provide a fantastic platform for growth, especially for our recently launched portfolio of TargetZero solutions, which electrify heat generation for industrial processes to support our customers’ decarbonisation objectives.”
Alteration Earth is seeking an acquisition in the clean technology or energy sectors. The plan is to do this within 24 months of admission and the deal would need to make the enlarged group worth a minimum of £30m.
There was a seed round and a subscription, so the average issue price is 7p. Pro forma net assets are 6.1p a share. The share price ended the first day of trading at 30p, but the bid offer spread was 10p/50p. According to investegate.co.uk there were 570 shares traded.
The lack of liquidity in the shares means that they are not an attractive investment for the time being.
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The share price of health products and diagnostic services supplier Goodbody Health Inc (LON: GDBY) has recovered by 11.1% to 1.5p during the week. The share price is still 58.3% below the level at the beginning of 2022.
Shepherd Neame (LON: SHEP) issued a full year trading statement and the share price edged up 0.9% to 812.5p. The Kent-based brewer and pubs operator says revenues are recovering and Peel Hunt forecasts a return to profit in 2021-22. Net debt was reduced from £93.2m to £75.3m by the end of June 2022. The estimated 2021-22 pre-tax profit of £7.2m is expected to improve to £9.6m in 2022-23, but that is a £900,000 reduction on the previous forecast prior to the trading statement.
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Fallers
Asimilar (LON: ASLR) is the largest faller on the week with a 20.8% decline to 10.5p. The technology investment company reported its interim figures, which show a £10.6m loss due to a sharp decline in the Dev Clever Holdings share price, which is currently suspended. Net assets were 25.3p a share at the end of March 2022. A relisting of All Active Asset Capital could boost the NAV.
The departure of chief marketing officer Mark Harvey from Chapel Down Group (LON: CDGP) knocked 17.6% off the share price, leaving it at 21.5p. He has been with the wine maker for six years. The share price is well below last July’s fundraising price of 59.5p. There was £9.2m in the bank at the end of 2021, so Chapel Down should not require any more cash to finance further vineyard planting.
Blockchain and digital assets investor KR1 (LON: KR1) has fallen by three-quarters so far this year, including a 16.9% decline to 24.5p this week. Net assets were 423% higher at 122.68p a share at the end of 2021, but that figure is likely to be lower now given the weak cryptocurrency market this year. There was £3.49m in cash on the balance sheet.
There was profit taking in Valereum (LON: VLRM) and the shares fell 15.8% to 24p.
Energy storage technology developer Invinity Energy Systems (LON: IES) generated revenues of £3.2m in 2021. VSA has cut its forecast for 2022 revenues from £26.5m to £14.1m. There are already contracts won valued at £13.8m. The loss is expected to reduce from £21.3m to £17.9m. There should still be net cash of £10m by the end of 2022. The share price fell 15.1% to 45p
S-Ventures (LON: SVEN) shares also fell by 15.1% to 31p. The organic snacks supplier generated interim revenues of £4.1m, while the loss was £815,000. S-Ventures has subsequently acquired Market Rocket Ltd.
Australia-based online fashion retailer MySale Group (LON: MYSL) shares were 186% higher on the week at 3.58p making it the largest riser on the week. Mike Ashley’s Frasers Group has acquired a 28.7% stake. Frasers would like to sell its end of line merchandise through the company’s platform. MySale Group is still 38.3% lower than at the start of the year.
Inspirit Energy Holdings (LON: INSP) shares soared to 0.074p on Monday and settled at 0.06p at the end of the week. That was a 103% increase over the week. Investors were impressed that the company’s waste heat recovery system, where waste heat exhaust is converted to energy, has completed the first phase of development. Further enhancements will be made before there are trials. Cash is limited, though. Inspirit Energy had £348,000 in the bank at the end of 2021 after a £213,000 net cash outflow in the previous six-month period. The company may decide to take advantage of the share price rise to secure more funds.
Oil and gas explorer Providence Resources (LON: PVR) more than recovered the previous week’s share price decline after the announcement of a discounted fund raising of $1.8m at 1.5p a unit (one ordinary share and one warrant exercisable at 1.5p). The shares ended the week 37.8% higher at 3.1p, which is the highest the price has been since the middle of March. Providence Resources has an 80% stake in the Barryroe oil and gas project, offshore of Cork.
Shares in gift wrap, gifting and stationery products supplier IG Design Group (LON: IGR) recovered 30.4% to 90p following its full year figures. The loss was no surprise, but investors appear to be reassured about the steps being taken to improve performance and margins. The US business is the main problem and it fell into loss, while the international business remained profitable. The customers are highly supportive, and the order book is already 71% of this year’s budgeted revenues. Directors have acquired shares at prices between 70p and 83p since the results release on 28 June.
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Fallers
The biggest faller of the week was Cornerstone FS (LON: CSFS), which admitted that its cash was running out when it reported its 2021 figures – just in time to make sure that the shares of the international payments company were not suspended. The share price fell 56.4% to 8.5p. The chairman and the chief technology officer are both leaving. Technology is the key to the business. There was £280,000 in the bank at the time of the financial statement, with a further £450,000 of loan note facilities available. Cash flow estimates show that a share issue will be needed in the coming months.
On Wednesday, LiDAR wind sensor technology supplier Windar Photonics (LON: WPHO) admitted that it would not publish its annual results by the end of June because the audit was not completed and trading in the shares would be suspended on 1 July. Before the suspension the share price fell 43.9% to 8p. Revenues halved in 2021 because of further delays to a contract, which may not go ahead.
North America-based coal miner Bens Creek (LON: BEN) has been hit by profit-taking with a 43.2% slump to 42p. The share price is still well above last year’s placing price of 10p, although it was 104p in April. At the beginning of the week, Bens Creek said that production capacity could increase to up to 80,000 tons a month when another highwall miner is up and running. Non-exec director David Harris bought 44,642 shares at 44.8p each.
Shield Therapeutics (LON: STX) is running short of money because US sales of iron deficiency treatment Accrufer and another downgrade by finnCap. The share price fell 40.4% to 7.75p – that is an 82.6% drop so far this year. Most of the 2021 revenues of £1.5m were generated in Europe. There is progress in US revenues with first quarter prescriptions double the number in the fourth quarter of 2022 at more than 3,900. Having failed to raise money via a share issue, management has obtained a $10m loan, which can be converted into shares, from major shareholder AOP Orphan. That may give Shield Therapeutics enough cash until the end of the year. The loan is secured on the US IP for Accrufer.
