Power Metal Resources presents at the UK Investor Magazine Summer Investor Evening 2022.
CEO Paul Johnson takes us through Power’s 14 projects and drills down into their most important assets and the metals Paul sees significant future value in.
FTSE 100 jumps 1% as oil stocks surge
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 narrows loss in FY 2022 on lower costs
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 hit record pledge lending as cost of living crisis bites
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.
AIM movers: Tekcapital considers Salarius float, plus Nanosynth, Jadestone Energy, Omega Diagnostics
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
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 trading on track, Quickline deal fails to meet consideration agreement
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-Sarco Engineering to acquire Vulcanic for £225.5m
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.”
